by Board Retailers Association | Apr 19, 2021 | Associate Members, Industry, Private Label, Resources, Retail Strategy
While 2020 started out with closures, quarantines and ever-changing regulations, many retailers were disclosing record sales by the end of the year, “best year ever” claims and similar results. Inventories of surfboards, paddleboards, skateboards, skimboards, wetsuits and accessories were emptied quickly, with refills slow to arrive. Loyal customers and new participants were eager to get outside, get active and simply get out of the house! While strong gross sales were indeed a positive sign amidst a period of uncertainty, frustration and job losses, I was hesitant to celebrate too strongly since profitability had taken a hit. Retailers who’d had banner sales reluctantly admitted that net profit (the money that was ending up in their pockets) was LESS than the prior year. Wait what??? Sales were UP, net profits were DOWN! Retailers were working harder and longer, sold lots of goods yet made less money—what happened? This disappointing realization was the result of unexpected/unbudgeted expenses, increased costs and low margins in certain categories. Unexpected costs to create COVID-safe retail environments tapped profits.Many retailers spent a lot of money to develop or enhance their online presence—new websites, upgrades & maintenance, Google Adwords, additional personnel & supplies and more—the boost in sales took many months to offset the necessary expenditures.Freight costs, especially those for surfboards and paddleboards, rose exponentially throughout the year, squeezing already-thin margins.Sales of boards and wetsuits, while strong, don’t provide the needed profits to cover the costs of today’s retail business. Margins for these categories are generally less than 40%, while the average cost of business for a specialty retailer is 44+%.Sales of apparel, footwear and...
by Board Retailers Association | Mar 25, 2021 | Private Label, Resources, Retail Strategy
Independent retailers have struggled against proliferating online and brick-and-mortar competition for years. The pandemic only heightened the unpredictability of the fast-changing customer, competitor and shopper behaviors, as well as supply chain disruptions. The Imperative for Science-Driven Pricing and Promotions Fortunately, indie retailers continue to adopt science-based lifecycle pricing (which includes prices, promotions and markdowns) to sort through the overwhelming data and separate the signal from the noise and hone in on accurate demand signals. These systems, which have manageable up-front costs with their cloud-based hosting model, make price and promotion recommendations to enhance margins and profits while aligning to category roles, strategies and financial objectives. A high-return area of focus is private-label items. Traditionally, shoppers had definite national brand preferences and were skeptical about private labels delivering equivalent quality. The pandemic has caused a change of heart, as newly price-sensitive shoppers turned to private-label items with a more open mind. A global shopper study conducted earlier in 2020 showed that a surprising 43 percent of shoppers are very likely to purchase private labels over a national brand during the pandemic, and 44 percent plan to remain loyal to private labels in the future, and post-COVID. A similar and more recent shopper study, which also polled shoppers in the U.S., Brazil, France, Germany, and the UK, uncovered even more dramatic results that underscore how radically shopper perceptions of private labels have evolved: 80 percent of shoppers see private labels as being of similar or higher quality than national brands. The March 2021 survey found that 17 percent of shoppers think private labels are much higher quality than national brands, while...
by Board Retailers Association | Sep 13, 2020 | Associate Members, Private Label, Resources, Retail Strategy
Now that summer is over, I’ve been chatting with specialty retailers across the nation on ways to boost profits, manage inventory & orders, keep customers coming through the doors and much more, as we head into 4th quarter. With uncertain consumer spending, retail closures, bankruptcies & job losses, and a consumer who wants an engaging retail experience along with quality, value and competitive pricing, the savvy specialty retailer will be looking ahead to see where all of these factors will lead 1, 3, or even 5 years from now. Consider the following questions as you strategize and plan–“how have my customers changed over the past six months, and what can I learn from it?”, “what products might my customers be interested in that I am not currently stocking”, and “how can I improve their customer experience when they walk into my store”. Here are some areas that, I believe, require focus and commitment in the months ahead: 1) Manage orders & inventory levels to maximize sales of high margin items & private label/shop-logo goods Many shops this summer were selling record numbers of surfboards, skateboards, accessories and more, often causing shortages and lost sales. Meanwhile, sales of high margin soft goods overall were down, compared to prior summers. While such hard good sales boost monthly numbers quickly, their low margins are usually below the cost of doing business, thus jeopardizing true profitability. NOW is the time to focus and prioritize on high profit, high margin items such as t-shirts, sweatshirts, hats, some accessories and certainly your shop-logo/private label items. Display and merchandise high margin items in the...
by Board Retailers Association | Aug 17, 2020 | Corona Virus, Industry, Private Label, Retail Strategy, Skateboard, Snowboard, Surf
Please click on the following link to view this Shop Eat Surf News Article (about BRA Retail Member Val Surf): Retail Check In: Val Surf A Val Surf skate section. Val Surf has four stores in the Los Angeles region that sell surf, skate and snow goods. Photo courtesy of Val Surf. Please note that this article is a Shop Eat Surf Executive Edition article so you will need to sign up and pay for access before viewing. We, at BRA, feel that the benefits of the SES Executive Edition Membership outweigh the cost. Be sure to visit the Shop Eat Surf website to view valuable Industry News and Resourceful Articles regularly via this link: Shop Eat Surf If you are not yet a BRA Retail Member, you can easily opt in to either Regular (no cost) or Distinguished ($99/yr.) Membership via this super simple join...
by Board Retailers Association | Jun 2, 2020 | Industry, News, Private Label, Retail History, Retail Strategy, Skateboard
It’s no secret that, prior to the pandemic, one of the greatest things about a skateshop was its fixture as a hub for the community, serving as a place to hang out, talk shit, and ask for a pivot cup or spare bearing or something. But with the shutdowns, shops have to find new ways to keep their local skaters and new customers hyped on the shop and invested in their survival.Gary Smith, the owner of Vù Skate Shop in Baltimore, and Ben Jones, owner of Kinetic Skate Shop in Wilmington, just 60-minutes apart from one another, recently released a shop collaboration deck and shirt. Two shops working together on a joint promotion is extremely rare in the skate biz, even though skaters will collab with just about anything. The ongoing pandemic has put skate shops in a weird place because, even though their storefronts are closed, they are still selling boards, more than ever before in some cases. There’s no set business model in place to weather a pandemic, but shops like Vù and Kinetic coming together to support one another gives one way forward for shops struggling to make it alone. This is one of the few times we’ve seen shops collaborate like this, where did the idea come from? Ben: Gary told me about this maybe three years ago. It was one of the coolest ideas I’ve ever heard. Especially since owning a skate shop has changed in the years that we’ve both been doing it. When we first started doing this, I feel like there were more rivalry between the shops. Now, we’re all friends and we’re all in the same fight together....
by Board Retailers Association | Mar 31, 2020 | Associate Members, Industry, Private Label, Retail Strategy
(aka how to stay stoked during these crazy times!)In the past couple of weeks, I’ve had numerous conversations with specialty retailers across the nation to brainstorm ways to keep revenue flowing, customers happy, employees paid and much more. Here are a few ideas that may help you during these unprecedented challenges: –COMMUNICATE WITH YOUR CUSTOMERS—keep them coming to you!Send messages to keep them stoked and positive via email, Instagram, Facebook, Twitter, direct mailAnnounce the “special” services that you are offering i.e. free local board delivery, free t-shirt with any online purchase, etc. Create online videos of new products arriving in the store, review of latest surfboard or finsPartner with local gym, physical therapist, yoga studio on how to stay in shape for surfing/paddlingRaffle off a high-ticket (but slow moving) item—surfboard, paddleboard, paddle, wetsuit –DO A PHYSICAL INVENTORYCompare/update physical numbers to those on your POS systemIdentify products to go on sale –REVIEW/UPDATE POS/POP SYSTEMUpdate, correct any numbers, based on physical inventoryCreate a 1 page “hot sheet” which identifies top sellers, slow movers, low inventory levels –REVIEW ALL PENDING ORDERS NOT YET RECEIVEDRevamp 2nd quarter sales projections, and adjust open-to-buy accordinglyAdjust ship dates or cancel orders if necessary –RE-MERCHANDISE THE STOREGreat time for new paint, more lighting, revamped dressing rooms, expanded window displayMove racks around—move departments around—make it look new and fresh! –DEVELOP NEW ART/LOGOS FOR YOUR PRIVATE LABEL GOODSGood time to focus on high quality, high margin productsAdd a new category –DO SOME EMPLOYEE TRAININGCreate “what if” scenarios and have them act them out with each otheri.e. how to handle refunds, how to upsell without pressure, how to cross-merchandisekey questions...
