Outside vs. Outdoor Economy

Wes Allen with a terrific article, alas on LinkedIn, on the current state of the outdoor/outside economy:

I’ve been thinking about this as the difference between the outside economy and the outdoor economy. They sound similar. They’re not.

The outside economy is aesthetic-driven and frequency-light. It’s a vibe-based lifestyle that involves very occasional activity in what many would consider core outdoor pursuits. Vuori joggers at the coffee shop. Blundstones because they look good with jeans. On Running shoes on someone who doesn’t run. These consumers vibe with outdoor culture without participating in outdoor activities with any regularity or technical need. They might occasionally go for a hike, but not often.

The outdoor economy is activity-driven. Forward-moving, muscle-powered pursuits done by people who choose products based on what the activity demands. The customer who walks into a specialty shop because they’re heading into the backcountry next week and can’t afford to buy the wrong thing. These customers keep coming back because the activity keeps sending them back.

Both economies are real. Both are valuable. But they run on completely different money.

Using the terms ‘outdoor’ vs. ‘outside’ to differentiate brands stocked at outdoor retailers is a fantastic way to explain and make sense of the current market challenges many of our favorite brands are experiencing. But here’s the reality they’ve been operating in over the last few years:

A Better Sweater fleece sold to someone who wears it to a brewery isn’t an outdoor sale. It’s an outside sale made through an outdoor channel. Patagonia counted it as outdoor. 

And now heritage brands: Patagonia, etc. are feeling the competition:

Heritage outdoor brands competing for the same consumer are bringing a $600 Gore-Tex jacket to a $90 jogger fight.

If you know your lane you might still do okay:

Vuori knows it’s an outside brand. They distribute through Nordstrom and general retail. They don’t pretend to make technical gear. They’re crushing it. Arc’teryx knows it’s an outdoor brand. They maintain technical focus and premium positioning. They’re also crushing it. The brands that are failing – or about to fail – are the ones stuck in the middle.

And all these challenges are enlarged by the challenging (to put it mildly) economic climate of tariffs and wars and political leaders who have lost (or never had) their marbles.

The surf industry took 15 years to recover from chasing lifestyle consumers at the expense of core surfers. The bike industry is collapsing right now for the same reason. The outdoor industry is heading down the same path.

That’s probably why so many brands are pivoting to trail running and are trying to serve that market segment – it’s still growing, for now.

For articles like these it’s worth to have a LinkedIn account, but luckily I just checked and it seems you can read it without logging in – it’s worth it, the reading, not the logging in.