By Aaron Waldron
This past Friday - the day following the U.S. holiday of Thanksgiving and recognized as the biggest retail shopping day of the year — was a great chance to score great deals on a variety of RC equipment from a myriad different superstores and manufacturers.
It might also be a clue as to why the RC market, and particularly the racing scene, isn’t doing so well. I found an article published in July 2016 by the marketing firm AdRoll that delves into how important the winter holiday shopping season is for the general retail environment; unfortunately, and unsurprisingly, the enthusiast side of the RC industry is immune from most of it. You can read the article here:
1. “Winter holidays dwarf all the rest, combined”
On average, retailers make four times more ($626 billion versus $156.8 billion) on all other holidays like the Back to School season, Mother’s Day, Easter, etc. Of course, the hallmark of these holidays is gift-giving, which is where the problem lies for the RC racing world; you can buy anyone a pair of socks, or a new Amazon Echo, but the overwhelming majority of recipients of RC equipment during the winter holidays (or any gift-giving holiday) are already hobbyists. It’s more difficult and expensive to buy someone an RC car kit and point them in the direction of their nearest track than it is to gift the latest and greatest gaming console. Sure, family members might purchase new battery packs or even a fresh kit for the RC gear head in their lives, but there’s relatively little room for additional growth for the industry during what’s an absolutely vital sales period for the rest of the retail world.
2. “Retail sales increase 21.2% during the holiday season”
In 2015, US retail businesses sold over 21% more in the month of December than any other month; as I noted above, though, there’s already a bottleneck choking off racing-related sales due to a finite number of potential customers. Sure, some retailers that operate racetracks across the country might offload a lot more ready-to-fly mini drones and other toy-like novelties during the holiday season, which could help keep the doors open; however, marketing entry-level race vehicles coupled with an accessible tutorial on how to get started in Novice-class competition would be essential to translating any new business into repeat racers.
Also, the lucrative buying market incentivizes others with greater profit margins to be more aggressive. Manufacturers and large online dealers can afford to offer deeper discounts to lure more direct customers, dampening the impact holiday shopping can have on the typical brick-and-mortar store.
3. “Holiday sales grow more profitable each year, even after factoring in population growth”
According to the AdRoll article, U.S. Census data noted a 16.72% increase in December retail sales from 2006 to 2015, nearly double the population growth of 8.56% during the same time period. I don’t have access to sales figures for RC companies to be able to say whether or not this holds true for the RC world — but if we’re not close, that’s a bad sign.
4. “The vast majority of holiday spending is still in-store, but online spending is growing fast”
Despite huge growth for online sales during the holidays, approximately 83% of U.S. holiday spending occurred at brick-and-mortar retail stores according to the AdRoll article. Again, I don’t have actual data to reference, but I don’t see how the RC industry is even in the same area code of that figure. In fact, such increases in online sales to large retailers and directly to manufacturers, at the expense of traditional retailers, could further complicate the scene’s stagnant growth.
The AdRoll article concludes with huge growth projections for online retail sales, and especially mobile purchasing, through 2019. That’s not necessarily a bad thing, as long as the RC racing scene can determine the best practices for growing its sphere of influence the other 11 months per year rather than brands focusing on cannibalizing the customer base of direct competitors. But if RC racers only see December as the waxing moments of their current sponsorship contracts, and the opportunity to cash in coupon codes for their own equipment, the industry as a whole will have a tough time finding surer footing.
Cover photo: BGR.com