Navigating Turbulent Waters: A Reflection on the Outdoor Industry's Rollercoaster Ride in 2023

The Daily spoke with outdoor industry analysts about the major themes that played out in 2023 and how they expect next year to develop.

Photo courtesy of Kühl.

Posted by: The Daily (Bart Schaneman) / December 21, 2023

The outdoor industry, a once-thriving sector, faced unprecedented challenges in 2023 as it grappled with the aftermath of the pandemic. In this blog post, we delve into the major themes that shaped the year, from economic downturns and inventory woes to changing consumer behaviors and unexpected bright spots. Join us as we explore the highs and lows of the outdoor industry's rollercoaster ride in 2023 and peek into what the future may hold.

2023 turned out to be a reckoning for the outdoor industry, with companies anticipating a continuation of the COVID-19 boom only to face unexpected hurdles. Nathan Pund, managing director at Houlihan Lokey, describes it as a "disappointing year," marked by a surplus of inventory, cautious retailers, and challenging macroeconomic conditions. The mild fall further impacted key buying seasons for outerwear and footwear, resulting in financial losses and layoffs across major players.

Despite the industry's struggles, Kelly Davis, director of research at the Outdoor Industry Association, notes a surprising increase in outdoor activity participation post-pandemic. With 14.5 million new participants, the demographic landscape is evolving, showcasing a shift towards more casual and experiential engagement. This diversification poses both challenges and opportunities for industry players looking to adapt to changing consumer preferences.

Inventory challenges loomed large in 2023, leading to aggressive sales promotions, particularly for big-ticket items like treadmills, bicycles, and kayaks. Matt Powell, a veteran outdoor industry analyst, highlights the saturation of the secondary market as people sell off excess equipment purchased during the pandemic. To combat this, Powell emphasizes the need for innovation in product offerings, urging companies to introduce compelling and superior products to stimulate consumer interest.

While many industry giants faced setbacks, some brands found success in unexpected niches. Accessories, particularly the drinkware business, thrived amidst broader challenges. Stanley's Adventure Quencher tumbler gained popularity on TikTok, showcasing the potential for unconventional marketing strategies. Footwear brands like Altra Running, On Running, and Hoka also emerged as winners, capturing the attention of the growing casual participant demographic.

Looking ahead, industry experts predict a need for consumers to update or replace products bought during the early stages of the pandemic. Climate change impacts and evolving weather patterns pose challenges, emphasizing the importance of adaptability. Extreme weather events, such as wildfires, and impending regulations around PFAS present additional hurdles. Expectations of continued participation growth, potential market consolidation, and caution in mergers and acquisitions suggest a dynamic landscape for the industry in 2024.

The outdoor industry faced its share of trials in 2023, but amidst the challenges, opportunities for innovation and adaptation emerged. As the sector navigates uncertain waters, the coming year holds promises of renewed consumer interest, potential market shifts, and the need for resilience. Stay tuned as we witness the outdoor industry's journey, discovering how it rises to meet the evolving demands of a post-pandemic world.