Licensed Sports Merchandise Market Analysis

Licensed Sports Merchandise Market Deep Dive – PESTLE, Porter, SWOT

The licensed sportswear market has become an integral part of the sports industry, reflecting the ever-increasing enthusiasm and loyalty of fans towards their favourite teams and athletes. This market comprises a wide range of products, including clothing, accessories, collectibles and memorabilia, all officially licensed and branded by sports organisations. In the face of changing trends in consumers’ tastes and preferences, the demand for authentic and high-quality licensed products is constantly growing. Brands are constantly striving to develop and diversify their products, to respond to a broad range of consumers and regional preferences. The study aims to provide a clearer understanding of the trends, challenges and opportunities in the licensed sportswear market.

PESTLE Analysis

• Political:
  In 2024 the sports market is influenced by the political conditions of the governing countries and their trade regulations. For example, the United States government has imposed tariffs on imported goods, which could affect the price of licensed products. In 2023, tariffs on textiles and clothing averaged 16%, which would have an impact on the cost structure of companies importing sports goods. Intellectual property rights have been discussed in the United States for some time. The trademark office of the United States reported a 25% increase in the number of trademarks related to sports teams and leagues in 2023.
• Economic:
  In 2024, the economic situation of the sports license market is characterized by a fluctuating consumer spending pattern. According to the Bureau of Economic Analysis, in 2023 personal consumption expenditures in the U.S. increased by 3.5%, indicating a positive trend in discretionary income. But the rate of inflation has also increased. In the first quarter of 2024, the consumer price index showed an annual increase of 4.2%, which could affect the purchasing power of consumers. However, the unemployment rate is expected to remain at a low level of 3.6%, which may help to support the purchase of licensed sports goods.
• Social:
  The social trends of 2024 show a growing interest in sports and team loyalty, especially among the younger generations. In 2023, the Sports Marketing Research Institute reported a significant increase in the number of millennials and generation z consumers who bought licensed sports products, from 60 to 68 percent. Social media has a significant influence on buying sports products. This trend explains the importance of digital marketing strategies for brands in the licensed sports goods sector.
• Technological:
  The role of technology in 2024 is important in the market for official sports products. The integration of e-commerce platforms has led to an increase of 40% in the sales of sports goods on the Internet compared to the year 2022, according to the National Retail Federation. In addition, the use of augmented reality in retail experiences is increasing, and already more than a third of sports goods retailers have introduced augmented reality in order to increase customer engagement. This technological development not only improves the shopping experience, but also gives brands the opportunity to present their products in a more innovative way and to reach out to the technologically advanced consumers.
• Legal:
  Legal factors influencing the licensed sportswear market in 2024 include a general compliance with intellectual property rights and consumer protection regulations. In 2023, the U.S. Congress passed the Trademark Modernization Act, which was designed to simplify the trademark registration process and reduce the number of fraudulent registrations. This law is expected to benefit the legitimate sportswear brands by strengthening their intellectual property rights. In addition, companies need to comply with the various state laws on consumer rights, such as the Californian Consumer Privacy Act, which imposes strict data protection regulations on companies that collect personal information.
• Environmental:
  In 2024, considerations of the environment are influencing the sporting goods market. In a recent EcoFocus survey, 25 percent of consumers indicated a preference for sustainable products. These companies are responding by incorporating more recycled materials in their products. A leading sportswear company, for example, reported that 15 percent of its product line in 2024 was made from recycled polyester, reflecting its commitment to reducing its impact on the environment. As consumers become more aware of the environment, this trend will continue.

Porters Five Forces

• Threat of New Entrants:
  Barriers to entry in the Licensed Sports Merchandise market are moderate, including brand loyalty and established distribution channels. However, new entrants can take advantage of e-commerce platforms to reach consumers. However, they will have to compete with well-known brands and obtain licenses from sports teams and leagues.
• Bargaining Power of Suppliers:
  Suppliers of licensed sports goods generally have little bargaining power, because there are many manufacturers and a wide range of materials. Suppliers can easily change their suppliers and also buy from several suppliers, which weakens the influence of a single supplier.
• Bargaining Power of Buyers:
  The consumers have a great deal of choice in the products and brands. They have a high degree of bargaining power. The presence of many competitors and the availability of many alternative products enable consumers to demand lower prices and better quality, and forces the companies to compete.
• Threat of Substitutes:
  The threat of substitutes is moderate, because consumers can turn to other forms of entertainment or to products that do not require a license, such as generic sportswear or fanwear. The emotional bond that fans have with licensed products can mitigate this threat.
• Competitive Rivalry:
  Competition in the licensed sports goods market is high. Many established brands compete for market share. In order to win over consumers, companies use aggressive marketing strategies, product differentiation and sponsorship of sports teams.

SWOT Analysis

• Strengths:
  • Strong brand loyalty among sports fans leading to consistent demand.
  • Diverse product offerings catering to various sports and teams.
  • Growing online retail presence enhancing accessibility and convenience.
• Weaknesses:
  • High competition leading to price wars and reduced profit margins.
  • Dependence on seasonal sales peaks, particularly during major sporting events.
  • Counterfeit merchandise affecting brand reputation and sales.
• Opportunities:
  • Expansion into emerging markets with growing sports fan bases.
  • Increased collaboration with athletes and influencers for marketing.
  • Utilization of technology for personalized merchandise experiences.
• Threats:
  • Economic downturns affecting discretionary spending on merchandise.
  • Changes in consumer preferences towards sustainable and ethical products.
  • Intellectual property issues related to licensing agreements.

LICENSED SPORTS GOODS MARKET IN 2024 – Strong brand loyalty and a wide range of products are the two main strengths of the market. However, the market is also faced with a high level of competition and the threat of counterfeiting. Opportunities for growth exist in emerging economies and in the form of new marketing strategies, but the threat of changing preferences and economic uncertainty are also present. The key to survival is to exploit strengths and opportunities and to counter threats and weaknesses.