Outdoor Retailer - Summer 2016 - 22

THE PULSE
tional for brick and mortar, and the suppliers
need to recognize that."
So Marchi's idea for the next step is to work
with a company like Evo that owns all the
equipment and apparel on his shop floor
and he takes a cut for selling it. He invests his
time and money in the shop's service side. "I'd
rather not have $200,000 in cash wrapped up
in inventory;I could put that money into my
service department," Marchi said.
Specialty shops are thriving in this service
role that e-tailers can't touch. Backcountry.
com can sell an avalanche transceiver cheap,
but it can't offer an avalanche-awareness clinic
or community event that rallies customers.
And they can't host big, popular events.
A Memorial Day weekend demo session
Richmond launched in 2004 at his Colorado
Kayak Supply has blown up into Paddlefest,
a festival with competitions for amateurs and
the world's top paddlers as well as instructional clinics and demos. Events, and especially
promoting them online, are the key to success
in the world of paddlesports, Richmond said.
"Events engage a lot more people and encourage them to make thoughtful, educated,
and strategic purchasing decisions. You don't
get that with online retailers," he said. "We as
an industry, especially in kayaking, need to
nurture and help paddlers grow through positive experiences on the water. Kayaking is not
an easy sport. You don't just buy a bunch of
stuff and try it out in the river."

THE DIRECT-TO-CONSUMER THREAT
Even with multi-channel challenges, specialty shops remain the king of outdoor sales,
especially in the winter-sports realm. They account for 51 percent of all the dollars spent on
ski and snowboard equipment, apparel, and
accessories, compared to 23 percent for online, according to the SnowSports Industries
America (SIA) trade group.
That figure hasn't changed for the last three
ski seasons, said Kelly Davis, the numbercrunching queen at SIA. But it could soon, especially with the growing number of suppliers
opting for direct-to-consumer discount sales,
sidestepping the traditional model of partnering with stores. Now, more industry titans
are opening their own branded stores, with

22 OUTDOOR RETAILER

/ Summer 2016

PARTY TIME
Specialty shops
bond with customers
at events.

EVENTS ARE THE KEY TO
SUCCESS IN THE WORLD
OF PADDLESPORTS,
RICHMOND SAID,
ESPECIALLY PROMOTING
THEM ONLINE.
companies like The North Face, Arc'teryx, and
Patagonia operating high-profile stores that
threaten local independent shops. "Direct to
consumer appears to be the channel-both
online and in-store-with the most growth
right now," Davis said.
Reactions to the threat of suppliers selling
direct-to-consumer and the tenacious rise of
Amazon can vary. Chatanooga, Tenn.-based
Rock / Creek, a longtime apostle in the world
of e-commerce, startled the outdoor retailing world in 2014 when it slashed its online
marketing spending by 75 percent. Last year,
it revamped its website to be more reactive
for mobile users and redoubled its effort to
drive more traffic into its seven stores. Rock /
Creek's renewed focus on markets within 100
miles or so of its brick-and-mortar shops is
driven by the growing push by manufacturers to reach buyers directly with deeply discounted, promotional deals offered through
Amazon, effectively eliminating retailers from
the traditional model.
Last year, Christy Sports, the largest privately-held ski retailer in the U.S., launched a
rebalancing of its online marketing strategy,
allowing each of its stores to sell items beyond
its own floors. The new approach focuses on
higher-margin items as well as competing

with the growing direct-to-consumer trend.
In January, Christy Sports announced it was
embracing suppliers and brands that "demonstrate allegiance to the long-term health of
specialty retailers," in a fiery press release.
Gordon Wade, Christy Sports' director of
internet commerce, called the explosion of
big brands offering discounted direct-to-consumer sales, an attack on the very specialty retailers who spent decades fueling the growth
of legacy brands with educated floor staff .
The promise of the internet was once about
filling voids in the market and servicing buyers who maybe didn't have a local ski shop.
The web also promised to help local ski shops
expand their reach. But then big brands saw
opportunities in online sales that undercut
retailers. When the internal pressure to grow
at a sustainable pace was replaced with shareholder pressure to grow at a breakneck, quarterly pace, online sales became a threat, not a
tool, for retailers, Wade said.
"We can live with companies going directto-consumer. We don't like it, but we can exist
when they are selling at a higher price point.
But the next step is going direct-to-consumer
at a competitive level and that is a very slippery
slope," he said. "Now we have brands competing at the Google ad words level, making sure
their product listings are always at the top. For
a retailer to do that and still have margins left
is very, very difficult. That's the brand putting
us in a position where we must find replacement products that we can sell to maintain
our own growth. But these brands that are aggressively competitive through direct-to-consumer and marketing efforts are also, by and
large, the staple brands for retailers, the ones
that occupy a greater footprint than any other
brands in our stores."
Wade points to the sudden death spiral of
Sports Chalet and Sports Authority, as a cautionary tale of retailers who went that route.
"They tried to go out and compete in that
arena at a pretty high level. It didn't pan out,"
Wade said. "Our goal now is not to grow the
online component. It's to maintain it and focus on our stores ... we have a lion's share in
destination resorts and that isolates us somewhat, but our city-based shops are feeling this
new world." O.R.

Andrew Kornylak

CASE STUDY

http://www.Backcountry.com http://www.Backcountry.com

Outdoor Retailer - Summer 2016

Table of Contents for the Digital Edition of Outdoor Retailer - Summer 2016