The World Federation of the Sporting Goods Industry (WFSGI)’s members are key sponsors, partners, outfitters and suppliers to athletes, teams, clubs, leagues, sport federations, and major sporting events. 

As a result, trends impacting the industry can have a huge knock-on effect. In this article, we explore two industry trends for 2023 and how they may impact the broader sport ecosystem.

In the short term, there are clouds on the horizon for sporting goods companies. Rising costs, the looming threat of a larger recession, and continuing operational challenges are set to create headwinds in early 2023. 

Furthermore, and despite a well-documented growing health and wellbeing trend, we still face significant risk relating to higher levels of inactivity - globally, 81 per cent of adolescents (11-17 year olds) and 27.5 per cent of adults (18-64 year olds) currently do not meet the World Health Organisation (WHO)’s recommended levels of activity. 

Inactivity levels, particularly amongst the next generation, do not only pose significant risks to global health but equally present a very worrying picture for sport. The next generation will soon become our core participants, fans, and consumers, and are critical to the future success and sustainability of the sport industry. 

For example, the five nations topping the medal table at the Tokyo 2020 Olympics were the US, China, Britain, Russia and Australia.

As a result, these can reasonably be assumed to be countries that invest heavily in sport. However, they have been calculated by the WHO to have the following national adolescent physical inactivity levels:

United States - 64 per cent of boys, 81 per cent of girls

China - 80 per cent of boys, 89 per cent of girls

Britain - 75 per cent of boys, 85 per cent of girls

Russia - 81 per cent of boys, 88 per cent of girls

Australia - 87 per cent of boys, 91 per cent of girls

These are shocking statistics that are in equal measures not attracting adequate publicity and not yet taken seriously enough by sport and its stakeholders. Without intervention, the inactivity levels of the next generation will risk the viability of current sport structures and likely lead to a marked contraction in the size of the sporting goods industry.  

Physical inactivity is a complex topic involving behaviour change across communities, cultures, and genders and it will require an aligned effort from all stakeholders to reverse or even halt existing trends. 

However difficult that challenge may appear, it is not one that the sporting goods industry or wider sport can afford to back away from.

As in previous years, WFSGI and McKinsey have identified the critical trends we predict will shape industry performance in 2023 - brand relevance building, sustainability, nearshoring, and investments in the industry.

The most relevant of these for the wider sport ecosystem, brand relevance and sustainability, are explored below. 

1. Brand relevance - Becoming a brand super winner 

Leading sporting goods companies are masters of brand equity building with seven of the 10 most valuable apparel brands in the world currently in the sportswear category.

Brands typically use a range of methods to build a strong brand. Our research with McKinsey indicates we will see further investments in brand building during 2023 as companies seek to maintain brand loyalty in an uncertain environment.  

Three of these methods are directly relevant to the wider sporting ecosystem and we explore them in turn below.

 • Method 1 – Developing a strong Direct-to-Consumer (D2C) model. As brands invest further in D2C, they will look for sport organisations or individuals who are able to (or can rapidly adapt to) support their new business model. 

Partners who can offer a deep understanding of their fans and potential consumer base will be most attractive to brands as they are best placed to deliver a clear return on investment. 

• Method 2 - The power of community. Brands are also exploring new channels to reach their target consumer base. 

For example, they have focused marketing efforts into existing communities with engaged participants which allows brands to develop more than just transactional relationships and more effective marketing spend.  

Brands will look favourably on partners who have understood the value of their fan data and invested smartly. Sport organisations or individuals with advanced fan data analytics who can segment their data, identify behaviours across subsections, and effectively engage those micro-communities will stand out in the increasingly competitive market for brand sponsorship money.

 • Method 3 - Influencer marketing. Influencer marketing plays an increasingly important role in building brand awareness and loyalty. Athletes remain the most trusted people when it comes to the technicalities of sportswear and equipment and, generally, influencers are key when it comes to engaging the next generation.

Critically for athletes from smaller sports, brands continue to invest in micro influencers with small but highly engaged audiences. 

Social media has democratised personal brand building and so there is no better time for athletes from across sports to invest time and effort in doing so to attract potential sponsors. 

2. Sustainability - Time to deliver on promises

Of the sporting goods companies surveyed by WFSGI and McKinsey 86 per cent have made a commitment to reduce emissions, tackle destructive practices, and embrace circular business models.

Most companies are driving initiatives that go beyond C02 reduction, tackling dimensions across the environmental, social, and governance challenge and many have aligned their approaches with standards published by the Science Based Targets Initiative, meaning they are referencing pathways specified by the Paris Agreement on Climate Change. 

However, as we report, many are still seeing rising absolute emissions. As they plan to meet their 2030 targets, the next two to three years will be critical. To get there, more investment and commitment are required, alongside a strategic approach that will deliver results and create competitive advantage. 

Brands must also ensure that claims made are underpinned by science against a background in which greenwashing is being targeted by both regulators and consumers. The industry is not alone in facing a ticking clock on sustainability. 

As companies accelerate their plans to transform their businesses, they will look for partners who match their values and who can help support them to reach their goals. Sports organisations with a credible, science based sustainability agenda that is being implemented will stand out. 

WFSGI is the IOC’s recognised organisation for sporting goods in the Olympic Movement. WFSGI is actively working to support a range of International Federations on topics ranging from advertising and marketing regulations, to equipment regulations, physical activity, sustainability and more.

The full Sporting Goods 2023 report, co-produced with our partners at McKinsey & Company, is available to download for free online.