Sport: Enrico Soffiati, Business Unit Director Multisport Dainese

Dainese and the Covid-19 emergency: how did you deal with and manage the lockdown period? What is the scenario like that you are facing in phase 2?

We are clearly living in circumstances no-one would ever have imagined as recently as the autumn of 2019. Over the past few weeks, I have spent some time seeking information on what we can expect in the months to come, and as the days go by it has grown increasingly clear to me that nobody has a clear vision of the future at the moment, for the future will depend on whether or not the probable new waves of the virus actually occur, and on how we respond to them. Practically all enterprises have put employees’ security ahead of financial gain in recent months, and are now seeking to reorganise for the future. At the moment, I believe that flexibility in various areas in response to rapidly changing scenarios, privileging short term cost control over mid-term investment, will permit identification of interesting opportunities for companies that are healthy, dynamic and open to change. In sporting goods in particular, we are seeing a positive note in post-lockdown sales due to increased participation in outdoor sports and a desire for self-fulfilment on the part of consumers following weeks of sacrifice. As well all know, demand for bicycles is currently outstripping supply. Sports such as inline skating have also found a new dimension and are growing faster than they had been for years. Though part of this initial euphoria is destined to evaporate, I am convinced it will have a positive impact, as sports become a part of the “new normal” and enterprises find space for launching a stable new form of growth. On the other hand, many enterprises are suffering from the uncertainty regarding when and how certain sports can be practised. The winter sports sector is the most uncertain of all at the current time; it will be a few weeks yet before we see how the legislators will act, and what will be the reaction among operators and consumers.

…sports become a part of the “new normal” and enterprises find space for launching a stable new form of growth

On what levers are companies working today and how can this affect relations with distribution?

We can expect to see months of turbulence, especially in prices. In the short term, distributors will be focusing on promotions with the aim of generating sales. Companies that can afford not to participate in the price war and that have continued to invest in the future will definitely have a competitive edge. Those who have managed to reduce their current production and continue to invest in introduction of new products and services for the future will find themselves with limited stocks and a leading proposal for the seasons to come, when consumers will be spending their money carefully, in search of true value as a result of decreased purchasing power. In this context of cash shortage, many brands will not be able to be particularly proactive, or will have to take major risks to become so: I believe we will see the creation of space and growth for relatively small brands covered by the broad shoulders of healthy parent companies.

…we will see the creation of space and growth for relatively small brands covered by the broad shoulders of healthy parent companies

What can be expected in terms of new ways of approaching the market by the end user?

Another change we are seeing at the moment is the way purchases are made. Sports fans have had plenty of time to study the features and performance of the products they want to buy online; in many cases, online shopping has been their only option, and this is the channel on which they have concentrated. The average consumer is therefore better informed than only a few months ago, and even in Italy, a country which notoriously lags behind in this area, the wall of mistrust in the digital sales channel has begun to crumble. In the months to come we can therefore expect to see strong polarisation of sales between specialised physical stores offering service and experience and the greater range and lower prices of the online sales channel. Even more than before, non-specialised bricks-and-mortar stores risk being crushed in the middle, without the ability to offer consumers added value. The shopkeepers first of all, but also the manufacturers, must propose partnerships permitting various chains to improve their customer service and be more competitive with the online sales channel. One more aspect I wish to mention has to do with workers’ habits and lifestyles. In the past few weeks, many of us have been working from home, and we have often been surprised to discover that our productivity increases: we achieve our daily goals and still have more time left over for our families and for sports. The capacity to introduce flexible management of work teams could potentially generate increased participation in sporting activities on weekdays, contributing to growth of demand and, in my opinion, better quality of life. Do brands need to change their communication strategies? Consumers who are more active on the web are also relatively easier to reach through corporate communications. Now that the public will be participating in less events, the challenge for everyone will be generating leads of value and obtaining the attention of consumers who are bombarded by a thousand brands coming from all directions. Also in the area of communications, but with a greater focus on sell-in, trade fairs will have to change profoundly. We in the sporting goods business are used to meeting our customers at big world-wide events such as Ispo, the Outdoor Festival, or Eurobike, to mention only a few. But the trade fair format will clearly have to be revised, and many brands will no longer be investing a major part of their marketing budget in events which cannot at the moment be guaranteed to attract the same number of visitors. Technology will definitely bring changes in this area too, but I believe that many brands will be acting independently. The challenge for the major trade fair events is to find a way of reinventing themselves and continuing to offer value for companies.

By: 2facethechange by Pubblimarket2 (open document)