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SYNCHRONY FINANCIAL

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Synchrony Financial : Powersports Help Answer the Call of the Great Outdoors

09/08/2021 | 10:22am EDT
Powersports Help Answer the Call of the Great Outdoors

It's 2021 and now that consumers are out and about, Americans of all ages are hungry for fun and fresh air - and they're finding it on land, sea, and on an ATV.

Demand for powersports vehicles soared in the past year - an increase of over 18 percent, according to the Motorcycle Industry Council - as consumers rushed to purchase ATVs, snowmobiles and motorboats.

Shoppers were also buying bicycles, canoes, and kayaks - and store owners could barely keep up demand. Paddle sports were the second-most-popular outdoor activity last June. According to the NPD Group, a market research company, paddle sport sales reached $172 million in June 2020, a 56 percent increase compared to the year prior.

Every category in the outdoor sports sector is experiencing a big boost in sales. Dick's Sporting Goods, for example, saw a record 10 percent spike in sales for 2020 and doubled its digital sales.

According to Mike Anderson, director of new business development at the American Boating Association (ABA), the strong number in sales is because shoppers are now reallocating their budgets and prioritizing new hobbies.

'People are looking for outdoor activities and they might have been thinking, 'Well, we were going to spend $5,000-10,000 at Disney World for a week - we might as well buy a boat,'' says Anderson. 'You can get into boating very cost-effectively. You can spend as little or as much as you want.'

For many powersports equipment suppliers, however, the challenge is in meeting the surge in demand for new items. One New Hampshire dealer, Nault's Powersports, sold more than two years' worth of inventory in less than four months last year.

Polaris, a leading manufacturer of motorcycles, snowmobiles, and ATVs, among other vehicles, experienced a huge increase in sales in North America, up 70% in the first quarter of 2021 from the same quarter the year prior.

But like so many vehicle manufacturers today, Polaris is dealing with pandemic-related supply chain constraints. Nearly one-third of Polaris vehicles currently being manufactured are being held back because of shortages of important parts like foam for seats and semiconductor chips.

Despite these delays and inventory shortages, consumer spending on new boats, ATVs and other powersports vehicles continued to rise, according to the Motorcycle Industry Council. In 2020, sales of off-highway motorcycles, which includes dirt bikes, trail bikes and other motorized two-wheelers, jumped roughly 47 percent, while ATV sales rose 34 percent. New powerboat sales also grew by 12 percent, a 13-year industry high, according to the National Marine Manufacturers Association.

A craze with universal appeal

Many first-time shoppers are attracted by the range of pricing and financing options for outdoor powersports vehicles. They're taking advantage of simple, clear payment options to finance big-ticket powersports equipment. Payment offerings have evolved to support the needs of younger shoppers with different budgets and different credit scores. From installment loans to credit lines built around the price of gear as well as the vehicle, the offerings are flexible to match the spending of modern outdoor enthusiasts.

'I can tell you that the world is so different from what it was 12 years ago, and our systems and the amount of information available to us to analyze a consumer have totally transformed,' Keith Mait, SVP and GM at Synchrony. ''We've evolved our systems to evaluate the creditworthiness of these consumers using historic credit history and data to make sure our consumers are able to purchase items when and where they want.'

Hoping for a generational impact

Across the board, experts agree that the bump in outdoor sporting will continue, rain or shine (or snow). Outdoor individual sports are expected to remain popular at least through the end of 2021, with McKinsey predicting an 84 percent increase in participation compared to pre-COVID-19 numbers. An estimated 7 percent of consumers planned to make a purchase in the motorsports, sports, and fitness category this summer, according to Synchrony's May 2021 'In Synch with Consumers Report.' With the 2021 winter season just around the corner, customer demand for winter-related powersports vehicles like snowmobiles, which experienced a 19 percent increase in sales in the past year, will likely remain high. This is because the love of the outdoors - and of boating, biking and off-roading - will only grow from here,' says Anderson.

'I hope that it continues with the younger generation,' says Anderson. 'I think a lot of people will get the love of the outdoors in their blood and it will become a passion.'

Disclaimer

Synchrony Financial Inc. published this content on 08 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 September 2021 14:21:03 UTC.


© Publicnow 2021
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