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German Market Insight, Summer 2020

A lot has happened since our last German Market Insight two months ago. Covid-19 lockdown regulations were easing up and sports goods brands were coming out of some of their most turbulent times after shifting strategies both in production and marketing. But it hasn’t all been doom and gloom, skateboard sales have been through the roof with little product left in stock and a similar trend in other solo sporting goods segments. By Dana Miskulnig.

As of June 17, regulations have eased up, shops have opened and can be entered only with a facemask and the number of customers has to be regulated by staff as well as ensuring disinfection measures are kept in place. The wearing of facemasks can also still be seen on public transportation and restaurants with plenty of space left between tables to safeguard social distancing. Event-wise, large scale events still won’t be permitted until October 31 at least and with strict regulations in place for small public and private events, however the rules for these are varied between states.

Looking at the economy, Germany suffered a 10.7% drop in the second quarter but thanks to the German ‘kurzarbeit’ system, unemployment wasn’t affected as sharply. With a slowdown in unemployment numbers in June, July 2020 saw the first decrease in unemployment since February with the number of unemployed people in Germany falling by 18,000. Germany’s ifo research institute (Institute for Economic Research) is predicting GDP to grow 6.9% in the third quarter and 3.8% in the last quarter of the year. To boost the economic recovery during Covid-19, Germany has unveiled the largest financial aid package in their history of the Federal Republic. According to the Federal Ministry of Finance “the total volume of measures affecting the budget amounts to EUR 353.3 billion and the total volume of guarantees to EUR 819.7 billion.”

The snowboard industry seemed to get the brunt of the Covid-19 hit with lifts and resorts closing early due to lockdowns so what has happened there in the last few months? Dominik Lyssek, Head of Marketing at SP United offers a bit of insight: “In Germany especially in these multisport shops that might be selling ski and snowboard gear in the winter become quite bike heavy in the summer and they are doing quite well and that probably has something to do with the fact that in Germany we were allowed to go outside and do sports. How that is going to pull over into winter is really hard to say. We can see the bike parks are full, lifts are in full swing, social distancing rules are being respected and it works. Whether that will transfer to the winter season the same way is really hard to say. Generally, I think many retailers pulled through the pandemic positively, we’ll see how the sales go at the end of the summer season, there’s already a big discount battle on the market.”

When it comes to surf, Andy from Norden gives us his take on the market: “Generally I would say, anything that floats sold well. For us it was beginner surfboards such as softboards, mini Malibus and longboard surfboards, as well as all-round hardboard SUPs and skim boards. We have worked on a lot of new products in the past few months, especially the stuff that sold well during these difficult times. If people are meant to stay at home, we need to give them stuff that they can use on their door step,” and commenting on the morale between brands and shops, “I think it was a good year to build up the relationship with our retail partners. We all had to survive, and we achieved that and came out with a smile as it was a really good season this year, if not, one of the best seasons we ever had. So if our partners help us with the planning of the next season, we are on a good path. I think everybody was happy the way it went and everybody believes in the future of outdoor sports and is motivated.” Over at Wellenreitshop Hamburg, the surf business has been good since the end of lockdown with customers buying products to use locally rather than travelling abroad, explained Yann Kuehlke. In hardgoods foamies has been a strong category followed by Malibu’s and shortboards but in softgoods sales have been slower.

We also spoke to Nicolas Wendelken from Choppy Water and got his take on the surf industry: “All watersports are selling strong: SUP, surf, and windsurf. We expect normal winter sales. Summer shows that people invest in sports goods and enjoy their sports as long as they can reach the spots/resorts by car. I am optimistic for winter sales for all countries which are close to ski resorts. We are very positive about summer business 2020 and optimistic about Winter 2020/2021.”

Malte from Surfline in Kiel tells us how it is at the frontline: “Inflatable SUP was pretty sizzling, stocks melting like ice cream in the sun, after the borders opened again surfboards also increased in sales, all outdoor sports hardware sold very well. We even had a big increase in skate longboards. Clothing is still a pain, all thanks to the big online outlets. We are only working with small brands like Hippy Tree, Picture and bleed for example. I expect a bit slower business at the end of the holidays so we are getting ready for snowboarding business that hopefully starts at the end of October. We will still keep stock levekls low and buy the gear where it is available. All outdoor gear will still stay strong in 2021… the virus will be around for a while, so indoor clubbing or indoor sports and so on will still be masked and keep the customers away, or won’t be allowed like concerts.”

Jörg Ludewig from Urban Supplies gives us his insight on the skate industry: “Every category is selling equally well, anything hardgoods related sells. There’s no real strategy, there was obviously a product shortage as everybody knows. So we were trying to get our hands on as much product as possible, buying anything that our suppliers were offering us on top of existing orders. So we got additional orders from companies who for whatever reason did not take their orders from suppliers. We weren’t really sure when we would get back to normal and the lockdown was only affecting brick & mortar stores, it didn’t affect online stores and our online sales in Germany are pretty strong so were still selling products. So we were on the lookout for any options to buy products on top of what we already ordered.”

We also spoke to Heiko Schoeller from Concrete Wave in Cologne, “Everything in hardware is in demand, with completes selling the fastest.” Heiko estimates that “of the increase in demand, 40% is from people returning to skate and 60% from newbies, with girls being an important component. At the same time demand for skate lessons has exploded, with schools full across the country.”