Overlanding - Market trends

THE VERTICAL GROWTH OF THE PANDEMIC ERA IS LONG GONE. CAN NEW MARKET PARTICIPANTS GAIN A FOOTHOLD AMID DECLINING SALES?

BY BRYON DORR

The overland industry, especially in NorthAmerica, saw a decade-plus of consistent,steady growth followed by double-digitgrowth for four-plus years. Then the pandemic hit,and after a few months of stagnation, the industrysaw nearly two years of vertical growth.As the pandemic has subsided and the world hasrecalibrated to the new normal, we've witnessedabout two and a half years of declining sales, withmore companies, including auto manufacturers,trying hard to attract the overland customer.Through my experience reporting on this industryfor more than 13 years and talking to a widerange of industry leaders for this article, the feelingis that we're a larger industry than we were in 2019,

and may soon see a similar steady growth curve to what the industry was on at that time. Fritz O'Connor, Iron Man 4x4 America vice president of marketing, says the industry has "contracted since COVID, but it is an enthusiastic space filled with enthusiasts.""A lot of brands think overlanding is the next big thing, but that was really 2017ish. We're a decade into overlanding being the next big thing. The growth phase of overlanding stopped at the start of 2022, with everything going down since. We've now seen more years in decline than at the peak, which lasted 20ish months. Overlanding is hereto stay, but the trend/fad is fading, and we're no longer in a growth phase but now in the dilution phase," said Matthew Scott, Adventure Imports and Overland Kitted owner.

Although the sector has contracted since COVID, overlanding remains an enthusiast space among consumers.

"I'm curious [about] the age range [of the overland consumer] and will be concerned if it continues to become an old person with disposable income activity only. [There is] a lot of great content on YouTube that I hope is connecting the younger generation to this in the real world," said Chris Horton, Yakima Products category manager.

INDUSTRY CONSOLIDATION

While loads of new companies seem to pop up in the overland industry all the time, lately the trend has been big investment firms and larger companies gobbling up industry stalwarts.

Moea Theroux, ARB USA marketing manager, said she has seen "a lot of consolidation. It's good for the consumer because all these conglomerates have to lift their game, and their products need to respond to quality and price points. It forces innovation to stay relevant."

On the flip side of that coin, Brian Fulton, Goose Gear CEO said, "Consolidation is terrible for the industry but great for small innovative companies. "He went on to talk about how consolidation has discouraged innovation because some of the big players continue to copy products from the little guys and then spend more on advertising those products.

Scott said, "A lot of new companies are coming into the space, diluting the space, and we might be on the tipping point of consolidation." He also thinks we could be two years away from some consolidated companies selling off brands or folding as they struggle to stay true to the brand ethos and product positioning that made them desirable in the first place.

OVERLAND RETAILERS

Scott further observed that "many dealers have pivoted to selling campers and/or trailers, and those are the shops that are surviving."

I've also seen this, as many overland retailers popped up during the COVID-era highs and have since disappeared. Many of those relied almost exclusively on drop-ship programs and quickly realized as the industry cooled that they didn't have a

"A LOT OF BRANDS THINK OVERLANDING IS THE NEXT BIG THING, BUT THAT WAS REALLY 2017ISH...."

way to differentiate themselves from the competition and couldn't survive on such thin margins.

Even though revenue is down almost across the board in the overland space, there are still healthy retailers servicing the overland community. Fulton said, "Smaller guys are selling less and less, and bigger guys with better systems and processes are doing well."

OVERLAND PRODUCT MANUFACTURERS

"Most companies have added direct sales to build revenue and profitability," said Scott. This is true for all the overland manufacturers that I talked to for this piece: Yakima, ARB, Iron Man 4x4, Goose Gear and Overland Kitted.

While some have done this since the start, others like ARB and Goose Gear, have just added direct sales in the past few years, to the dismay of many retailers, as sales across the industry shrank. That said, both companies emphasized how important their dealership network is for the success of their business and the health of the industry overall.

INDUSTRY SEASONALITY

One aspect of the overland industry that I discovered in my discussions with company executives is just how seasonal it is. Everyone I talked to basically had the same thing to say: Springtime is when the bulk of yearly sales happen, with summer usually being strong as well. A holiday bump can happen but is highly dependent on the products and incentives/sales on offer.

Theroux said, "Usually, in the spring, people start

From Overland Expo tothe SEMA Show Overland Experience, events continue to serve as the sector's "canaries in the mine."

The changing demographics of events will be an important harbinger of growth. Will young attendees continue to spend money at the same rates as older enthusiasts?

Overlanding is a seasonal industry. The bulk of sales take place in spring as enthusiasts gear up for adventuring by Memorial Day.

building vehicles to have ready for the summer. "This was reiterated by O'Connor, who said there is "definite seasonality. Early spring is when people start buying to build and go adventure by Memorial Day."

OVERLAND EVENTS

O'Connor also said, "Events are the canary in the coal mine of where the industry is headed."

I find that to be true, as events seem to mimic the industry pretty well. For instance, in the past few years, we've seen more large shows and fewer smaller ones. We've also seen vendor participation at all the shows outpace attendance, although attendee numbers have remained strong. Additionally, we've seen more complimentary product companies to the overland space market harder to the industry and attend more of the events.

Seeing the builds and products on offer at the shows and talking with attendees can give great

insight into the industry's health. Todd Scott, Yakima Products category manager, says he "talked to more retired-aged adventurers looking to drop cash than younger folks" when he attended Overland Expo Pacific Northwest in June. That is a concerning observation from the perspective of growth in the industry.

AUTO MANUFACTURERS' INFLUENCE

One of the biggest trends in the past few years, and one that doesn't look to be slowing down any time soon, is the automotive OEMs' focus on building great off-road-capable overland vehicle platforms and supporting those platforms with overland accessories at the dealership. OEMs are also partnering with trusted overland industry companies on factory-built special editions—think ARB with the Tacoma Trailhunter and AEV with the Colorado ZR2 Bison.

"INNOVATION IS KEY TO GETTING NEW AND OLD OVERLAND COMMUNITY MEMBERS ALIKE EXCITED ABOUT PURCHASING PRODUCTS."

While newer, overland capable vehicles still draw enthusiasts, there is now a growing interest in the modification of older vehicles as well.

"OEMs are really paying attention to the space. It's good for the consumer because of choices from dealerships and the aftermarket and the better products on offer. Lots of new people to the space get guided from the dealerships/OEMS and/or get inspired for aftermarket upgrades on their own, "said Theroux.

"The influx of new overland-capable vehicles that are dropping right now is going to generate growthin products specific to those vehicles, which in turnsells more tents and awnings. The easy button isto buy from the dealer/manufacturer for the buildout.However, you're going to pay a premium andmight not get the quality you think you're getting,"said O'Connor. He went on to say the "strength ofthe industry is shown and legitimized by the OEMs/dealers" being so invested in the space.

Goose Gear's Fulton also pointed out that morecapable-from-the-factory overland vehicles mighthelp sell aftermarket items like drawer systems,rooftop tents and other overland accessories thataren't vehicle performance upgrades. Many of thesenew vehicles don't need much on the capability andperformance fronts, but can still use some help onthe storage and camping fronts.

BUILDS STARTING WITH OLDER VEHICLES

Inversely, Fulton pointed out that older vehiclesare hot again for overland builds. He said, "as theeconomy cools, people are starting to build theirolder vehicles, like the JKU and older 4Runner."With the average new-vehicle purchase nowabove $47,000 and most popular overland vehiclesmuch more than that, consumers are finding waysto get their dream overland machines built. Startingwith an older used vehicle can allow for morefunds to be used toward modifications andpersonalizations.

While it has seemed like so many new overland community entrants have bought new vehiclesand modified them right away, it's likely that buyeris much rarer than we might think. As AdventureImport's Scott pointed out, "Historically, the thirdbuyer is the one to modify a vehicle." However, itdoes seem like in recent years more people havebuilt their overland vehicles up before or right aftertaking first ownership.

MORE GEAR MEANS BIGGER TRUCKS

While midsize trucks have been and still are thego-to for most of the world, fullsize trucks havebecome more popular recently with the NorthAmerican overland crowd. Bigger trucks offer morecarrying capacity and more space. As the trend continuesto be carrying more and more gear and beingmore comfortable out in the wilderness, the fullsizetruck just makes sense.

Trucks, in general, are hot in the overland space.Because of that, truck-bed racks have also seen anexplosion in offerings and innovation in the past fewyears. Yakima's Scott said, "Jeeps, FJ Cruisers and4Runners were less present than in previous years[at Overland Expo Pacific Northwest]. This was theyear of the truck and truck rack."

PRODUCT INNOVATION

O'Connor sees innovation and interest in suspension,bed racks and canopies. He also pointed outthat, "We don't sell consumables, we sell big-ticketdurable goods. We have to rely on new peoplecoming into the space or people finally replacingsomething [to continue selling products]." Innovationis key to getting new and old overland communitymembers alike excited about purchasing products.

Yakima's Horton said it's "all about temperatureregulation. Small, portable diesel heaters and ACunits are where I have seen the most movement inthe past few years. Summers have only become hotter,and cold nights are very common in desert climatesor for those winter travelers. I see the shape,size and ability all getting better, but also addingadditional features like power storage or even generationfor powering items in camp." He went on

Rooftop tents (or RTTs) areso popular among overlandersthat even Home Depotand Lowe's now sell them.

Overlanders love their gear,but innovation and realsolutions to problems arethe keys to truly successfulproducts.

to say, "For product categories to be innovative, itcan't just be shopping a supplier catalog to hit atrending consumer ASAP. Instead, brands will haveto invest in the user perspective and build productsto target them. We could see some more productinnovations across categories like rooftop tents inthe next two to five years as the brands and theconsumers mature."

Theroux wrapped up our innovation discussionby saying it "must be a solution to a problem thatexists versus just being a really good product."The market is saturated with products, but there isalways room for new products that relieve a painpoint for consumers.

ROOFTOP TENTS

No discussion of overland trends would be completewithout talking about the ultimate overlandfarkle, the rooftop tent (RTT). O'Connor said it"seems like everyone is getting into the RTT game,the market is getting saturated, and it's not greatfor the consumer because of the quality." As oflate, it really has seemed like a race to the bottomfor RTTs in terms of price and quality. An RTT is abig-ticket vehicle adornment that many consumerswant, even though they're likely to use it just oneor two times a year. Because of this, lower pricepoints are highly attractive.

Theroux said, "RTTs are getting bigger and morespacious. So many products are getting bigger and heavier, which is pushing vehicle size larger."She has also seen a shift from softshell RTT to hardshell because of their quick deployment andother options.

When you see RTTs for sale on websites likeLowe's and Home Depot, like we have for a fewyears now, you know overlanding has saturated themarket and is likely here to stay.

POLITICAL AND ECONOMIC INFLUENCES

There are many factors that could stifle sales inthe overland industry. Many of them are not withinthe control of those in the industry or community.While the supply chain has mostly reboundedfrom its pandemic woes, the rising cost of quality

"SO MANY PRODUCTS ARE GETTING BIGGER AND HEAVIER, WHICH IS PUSHING VEHICLE SIZE LARGER..."

Land access and the ongoing closure of trails comprise a major threat to the overlanding hobby.

raw materials continues to be an issue, especiallyas various wars continue to rage around the globe.Add in substantially higher shipping rates acrossthe board, and you've got a recipe for increasedproduct pricing.

Higher product pricing can be hard for consumersto stomach as they continue to deal with high inflation,continued increases in the cost of living andpolitical uncertainty. "Political, economic [high inflation,high gas prices], and coming out of the COVIDpandemic have stifled big purchases, but this is notunique to the overland industry," said Theroux. Thisopinion was reiterated by O'Connor, who noted that"no industry, even overlanding, is immune to people'seconomic concerns."

Fulton also brings up a great point: A "majorissue is closing of trails." He went on to talk aboutthe continued closing of off-grid camping opportunitiesin North America, and how easy access tothese opportunities are one thing that has fueled the growth in overlanding on the continent. Fultonsays that "education is needed," but doesn't havea definitive answer for the best way to reach themasses with critical information caring for publiclands and the political championing that can keepthem open for all to enjoy into the future.

LATE 2024 OVERLAND INDUSTRY TRENDS

To sum it all up, the overland industry is currentlyexperiencing decline, but also still quite healthy.Growth is likely to be seen again in the near future,just not at the exponential rates seen during thepandemic. That possible growth could be hinderedas geopolitical events continue to unfold andraise raw-material and shipping costs. We'realso likely to see continued consolidation in theindustry, but it's unclear how that will affect theindustry's health.

New vehicles, especially fullsize trucks, are ahot category, and are driving some of the recentinnovation and new-product development. Modifyingolder used vehicles is becoming very popularagain, as new-vehicle prices continue to rise. Truckracks are a hot category with lots of new playersand innovations. The stalwart RTT segment is fullysaturated and price point is largely driving much ofthe sales.

It's hard for smaller retailers to get a foothold inthe industry, and larger retailers continue to expandtheir product offerings, with many bringing inindustry-adjacent, off-road-capable RV products.Retailers are also having a hard time competingagainst manufacturers in the space, as most nowoffer direct sales. A bulk of overland industry saleshappen in the spring, so let's cross our fingers andtoes for a strong first half of 2025.