By Rob Southwick & Nancy Bacon
The theme of 2018 was one of “uncertainty” as a result of a continued decline in sales from 2016’s peak numbers. Through the first 10 months of 2018, NICS checks for firearms purchases were down 5.3 percent from 2017 (10,889,461 to 10,307,725). Second quarter checks fared worse than the first quarter, but some of this might have been in reaction to accelerated sales in March after the tragic South Florida shooting.
Contrary to the image often portrayed in the mainstream media, 2018 was still a strong year — with January through October NICS tracking close to 2015 NICS. At that time, 2015 was the second-largest year ever reported for firearm sales. (See Monthly NICS Firearm Checks chart above.) As always, there’s much more happening behind the headlines. Let’s take a deeper look at 2018’s challenges plus the opportunities in front of us, followed by our 2019 prediction.
Online, Social Media Trends
Online purchases continue to grow in strength. For example, from January through June 2015, according to Southwick Associates’ HunterSurvey/ShooterSurvey tracking study, 34 percent of handgun ammunition was sold online, but by the same time in 2018, online purchases had increased 15 percent. Likewise, typical of other hunting products, 20 percent of game calls were sold online in the first half of 2015, and increased by 25 percent by the first half of 2018.
It’s not just about the online-only retailers, however. Traditional brick-and-mortar shops find it increasingly important to have an online presence. However, it’s also becoming increasingly difficult to operate online — with sites like Shopify moving to restrict the sales of firearms and accessories simply out of off-track personal opinion. The industry has seen similar issues conducting business with banking, and even large retailers restricting business with the firearms industry. Without steady pressure on elected officials to maintain a fair and open marketplace — and efforts to encourage greater public support for the same — this trend could become more severe. Stay tuned, vigilant and active on this issue, as well as others impacting the trade.
Consumers are more likely to expand online habits, and the smart retailer or range operator will adapt accordingly. Services such as reserving a lane via an app or gaining instant feedback if a product is in stock continues to be more of the norm than the exception. When younger consumers walk into a store, success will often hinge on already having some sort of online interaction with them, such as price/inventory checks or similar.
Likewise, communications and shopping influences are decidedly different. Internet/social media continues to grow as a source of information and entertainment.
Hunters and shooters look to see people like themselves engaged with products and experiences of interest to them. Keep it real. They spot fakes and posers. It is becoming increasingly important for manufacturers and retailers to market across many different media channels to reach all groups of customers, as much of the younger consumers only use online media.
Stay Focused On The Consumer
For manufacturers and largely retailers, too, the Bass Pro Shops/Cabela’s merger remains a concern. With greater marketing capabilities, some independents fear the new retail behemoth presents a larger threat than before. Many manufacturers are concerned about the risks associated with so much business conducted with one retailer, and the bargaining clout this provides. We recommend remaining focused on the consumer.
We expect the consumer market to remain at least relatively stable and could grow if we pay proper attention to the products they most want, and marketing to them. Independent retailers and manufacturers need to concentrate on making sure their products, service and brand exceed consumers’ expectations — for all demographics.
With hunters and shooters becoming a more diverse group, do your best to make sure consumers seek your brand and have a positive experience. Done successfully, your business will thrive amidst new and increased competition. If not, consumers will drift over to other retailers or competing manufacturers’ brands, not just Bass Pro/Cabela’s.
Growth Opportunities In Front Of Us
The home-protection/self-defense market appears to be more stable than other parts of the trade. Driven more so by consumers who do not see themselves as vocal firearm owners, this market is critical not just for business, but also to help maintain Second Amendment freedoms. Maintaining (or increasing) advertising and promotions toward first-time firearm buyers is a smart idea. And the opportunity is there.
Recent research by Southwick Associates for the NSSF revealed there are 24 million Americans who have yet to buy a firearm, but are very interested. Often, we’ve seen sales limited due to a shortage of convenient places to shoot. Demand is still high for shooting ranges in suburban and urban areas. Considering all the indoor opportunities available — from new range equipment to interactive shooting fun — this is definitely a growth area for the industry.
Make new shooting opportunities fun and exciting. “25 yards-and-a-hole-in-paper” is not necessarily attractive to today’s younger consumer (35 and under). They expect to be entertained, and for all their senses to be engaged. The younger generations are very social, more so than previous generations, and seek new experiences with an often diverse group of friends.
They will likewise instantly share their good (and bad) experiences with their friends near and far, before ever leaving your facility using their smartphones. Be sure to offer fun, interactive shooting activities, encourage group events and try to adapt as best and safely as possible to their expectations regarding a fun day of shooting. Don’t try to force them to adapt to your style and preferences — most of them won’t.
Emerging new markets warrant an extra look for the industry. NSSF research conducted by Southwick Associates revealed high levels of interest from Hispanic, African-American, female segments and more. Catering products, messaging and special events to these often-urban communities will help boost sales. We cannot treat them like traditional customers. They have different questions and expectations. Safety concerns tend to be very high with these first-time shooters, so be sure to emphasize safety in your promotions, and make sure they see your safety rules and practices when they enter your store or range.
Many of these would-be customers are driven by images they see in the mainstream media and hence expect less-than-friendly faces at the range, which is why many will not visit a range or retail store. Overcome these concerns by training your sales staff to be welcoming and to understand these customers may not have a background in firearm ownership and will have many reasonable questions. Engage them in their preferred media, provide basic instruction and emphasize safety from Word One.
(Additional work is underway to learn how to encourage them to visit a store or range and make their first purchase. Stay tuned, results are expected to be released at SHOT Show 2019.)
Southwick’s 2019 Prediction
The decline in firearm sales, as measured by adjusted NICS data, is slowing. From January through October 2017, NICS checks declined 10.1 percent from its all-time peak in 2016, but declined only half that rate from January through October 2018 (-5.3%).
At the time this article was written, the November midterm elections are over, but sales and NICS checks data for November were not yet available. Considering the Senate and presidency remain Republican-controlled, any new radical restrictions in 2019 forwarded by the now-blue House will likely not be enacted. New firearm sales restrictions passed in some states will hinder sales in those areas, but should not cause significant declines nationally.
With the threat of recession in 2019 low, as long as no social shocks are experienced such as another heartbreaking shooting, our prediction is for 2019 sales to change from 0 to -3 percent versus 2018 sales levels — driven mostly by the slowing decline in new firearm sales. Of course, any significant media coverage of increasing drumbeats for greater firearm restrictions by the U.S. House of Representatives or via the judicial system will impact this prediction and drive sales into positive growth territory.
Trends will vary for specific types of firearms, too, such as shotguns, semi-auto handguns and others.