Outlook For 2016

Uncertainty Still Exists, But Positive Trends Developing

With today’s “normalized” market, it’s important for retailers and manufacturers to keep current customers engaged, actively recruit new ones and they can’t expect demand to remain at levels seen in recent years. Simply having product in stock doesn’t mean it will sell, as was often the case in recent years. Retailers and manufacturers should be proactive in their marketing, not complacent.

Probably one of the biggest challenges facing dealers in 2015 was projecting sales and inventory. In mid-2014, the 12-month sales trends were down for the first time in years. The trade became uncertain if sales would stabilize, drop further or grow again. Recalling the inventory shortages of recent years, planning has been a problem. It’s hard to project if demand will be up or down a year or more into the future. This uncertainty still exists, though at a lower level, and likely will remain a concern going into 2016.

In 2015, manufacturers began introducing new products to the market, which helped stir up interest from consumers after 2014’s slowdown. The increased trend in new products will continue in 2016, especially as companies are catching up with demand. Because future sales are always uncertain, smart companies know new products are needed to capture attention from customers — both from retail buyers and the end users.

Election Brings Obscurity

Now less than a year away from the presidential election, no one knows how it will ultimately impact the industry. Prior to the 2008 election, no one could have projected the final results, which kick-started the unprecedented run in firearms sales. This surge was largely based on public concerns about the ability to purchase firearms in the near future, but other factors have since come into play that further increased sales — including greater interest and participation from adults in their 20s and 30s, to the increased popularity of MSRs and more.

In short, since the initial fear from the 2008 election, there has been a cultural shift toward greater interest in firearms, which have further sustained sales. Proclamations from elected politicians, and those running for office, for further gun control measures have further boosted sales from time to time.

The biggest challenge before us as an industry is to maintain interest among the new customers introduced since the last election. If the Democratic party wins, we might expect some additional sales increases from people concerned about further restrictions, but each successive wave of fear-based buying has been smaller than earlier buying waves. Additional firearm, ammunition and accessory sales will likely be largely dependent on keeping our current customers engaged and active. The industry needs to work collectively to promote the safe, fun and abundant opportunities available from the shooting sports or the recent run in sales might prove to be short-lived.

Another uncertainty occurring outside the industry relates to the soft global economy. Financial negatives such as Greek and E.U. financial squabbles, a downturn in China’s economy and Middle East conflicts reverberates through the U.S. economy — ultimately depressing job creation and income. These reductions in income can reduce demand for firearms, ammunition and accessories.

New Customer Base Is Key

When it comes to increasing diversity in the shooting sports, the industry has taken note — which is great news! In the past year, Southwick Associates has been helping NSSF identify opportunities to engage with new customers and their motivations. There’s a huge untapped demand within the multi-cultural markets. NSSF will be further releasing the details at SHOT Show and more later this year, but some examples of the facts we’ve learned include:

• Virtually 100 percent of African-American, Hispanic and Asian American audiences contacted through our anonymous national survey indicated some level of interest in trying target shooting.

• The majority of prospective participants in these demographics don’t know where to go shoot. In some cases, indoor ranges were close by.
• Many potential new shooters in the Hispanic, African-American and Asian-American communities have misinformed, preconceived notions of what a range may be and this has stopped them from visiting to this point.

• Communicating with these audiences is relatively easy, but will require using advertising outlets and media not commonly engaged by the traditional shooting sports industry.

It’s important for the industry to adapt to multi-cultural preferences and expectations, which will help welcome them into our ranks as active customers. I spoke with Samantha Pedder, NSSF outreach and diversity manager, and she’s leading a public campaign to test how to convert this interest into new customers.

“Multi-cultural audience’s perceptions of target shooting and what they expect are different from our traditional white audience,” Pedder said. “The NSSF is testing a professionally designed advertising campaign in four pilot states, directed at these markets, to encourage them to visit a range and try target shooting. Messages are based on lessons we’ve learned through research; by partnering with local ranges, we’re evaluating their response. The lessons will be used to improve the next campaign, which will be expanded into other areas.”
If you’re interested in learning more about how to reach these markets, Pedder notes SHOT Show will provide numerous opportunities for you.

“For ranges and retailers wanting to expand their business, we strongly encourage them to attend the SHOT Show to learn how to attract these customers to your business. Also, keep an eye on future NSSF communications,” she added.

Stay tuned: These new markets have the potential to start the next wave of growth for our industry.

Other Trends Of Note

There are a few additional factors and trends of note to consider for a 2016 outlook. Ammunition shortages outside of rimfire are easing, growth prospects continue to be somewhat limited for most sectors in the international market and accessory sales should continue to do well — especially as new firearm users learn more about their personal preferences and customize their guns. Hunting should remain steady, with younger hunters interested in the local food movement being a pleasant surprise, and might help offset the long-term loss of participation among aging Baby Boomers.

We know from our Southwick Associates Media Monitor service that customers are becoming more tied to Internet-based information sources, and we don’t see this trend easing at all. A dealer’s marketing and advertising efforts should consider these channels, but don’t abandon the traditional print and television mediums — our research indicates these are still top information choices for hunting and shooting sports enthusiasts.
By Rob Southwick,
President, Southwick Associates

Southwick Associates provides information and insights to help companies reach greater levels of success through data-driven decisions. Specialties include measuring the size of the market and specific niches, tracking trends, identifying product features and price points preferred by customers and more. For more information, contact Nancy Bacon, director of business development, at nancy@nullsouthwickassociates.com.

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