PROTECTING RETAILERS AND A LIFESTYLE

SURF SKATE SNOW SUP WAKE

Specialty Snow Retailing Sure Is Fun!!!

Dear Fellow Retailers,

On the Monday night before SIA a few specialty retailers met in Las Vegas for dinner and to discuss the state of specialty snowboard retailing. I want to share what we discussed and the outlook for going forward.

First of all, I think we all believe that specialty snowboard retailing, as it’s been historically, is over. The “old days” of each of us forming meaningful relationships with our vendors and customers, and offering great customer service at a fair price, are done. There are no more “territories”, there is no more “holding price,” and loyalty from vendors and consumers ain’t like it used to be. Snowboard hardgoods & softgoods are massively over-distributed, the consumer can get bargains in November, and the Internet makes almost everything we sell available at a discount. A 40% up initial margin, plus a few points for volume and multiple categories doesn’t work when box stores and others go off-price so early. I’m not telling you anything you don’t already know.

Overall we discussed that snow business has been tough. Though a couple of shops in the snowy Northwest were up this year, most of shops to have seen a decrease in sales, decreases in margins, and many have not been selling snowboard equipment profitably. Obviously we all need to be profitable and ideally have relationships with our vendors that make sense for us…and for them. We are the shops that make their products – especially their premium products – look good. We are the shops that give great customer service and we are the shops where the staff actually participates and cares about the sport and the lifestyle. And somewhere, deep inside their corporate spreadsheets, we think that some of our vendors still care about the service we provide for them and the customers. And bottom line, we decide which brands are cool.

There was general consensus that we need to evolve our relationships and terms with our manufacturers. We need to evolve our model for how we sell snowboard equipment. We must be profitable!

Though every shop has its own deals with the manufacturers and different geographical issues, some of the ideas raised were:

1. We need a minimum of keystone margins initially on all snow hardgoods, including the cost of freight.
2. We will pay for what we sell when we sell it.
3. We can return unsold products at the end of the season.
4. We need the ability to swap out product.
5. We need mark-down dollars when box stores, chain stores and Internet vendors go off-price.

The reason I am writing this is that we want to share this information with other specialty retailers and get everyone more of us involved in our future and our fate. This was not an “exclusive” meeting, but rather a gathering of friends and shops that I have had on-going dialogues with over the years. And next year we want to make it a bigger gathering. I would urge all shops to try and keep in communication about the snow industry. At the end of the day we are not competing with each other, but more with huge chain stores, Internet businesses and even our own manufacturers that sell direct.

I know it’s a year ahead, but make plans to be in Las Vegas by 6PM the evening before the show next year. We’ll all get together to eat, drink and talk. In the meantime feel free to keep a dialogue going about the snow industry and pass this on to any other shops you think should be involved.

Mikke Pierson
ZJ Boarding House

2 Comments

  1. Mikke,

    you have definitely said a mouthful!

    You have 5 action items on your list:

    1. We need a minimum of keystone margins initially on all snow hardgoods, including the cost of freight.
    2. We will pay for what we sell when we sell it.
    3. We can return unsold products at the end of the season.
    4. We need the ability to swap out product.
    5. We need mark-down dollars when box stores, chain stores and Internet vendors go off-price.

    Against these items are just a few huge issues:

    1) THE BIG BOX SHOPS:volumes can be found at the mass marketers and since some of these companies that you deal with are publically owned, they need to deliver BIG numbers. Hell, even the smaller vendors you deal with have massive marketing costs and targets to hit! Big box shops deliver these big numbers. But it hurts their relationship with the little guy.
    (ie YOU!)

    You want the margins but the vendors need the volumes…

    2) THE INTERNET: Internet shopping sites offer no real service, but exceptional depth of product. The fact is that many folks may go into a core shop, examine the equipment and then do more research on line…and eventually purchase on line. The fact is that some internet websites DON’T have to carry a huge amount of inventory. So while you can’t compare the experience of shopping on line to the experience of being in a real shop, many customers are voting with their mouse, their feet and their wallet.

    Independent book and record stores are two prime examples of what happens when an entire retailing market undergoes complete change…

    Will skate and snowboard shops suffer the same fate?

    The KEY thing that sticks out for me about what you wrote about is this:

    “We are the shops that make their products – especially their premium products – look good. We are the shops that give great customer service and we are the shops where the staff actually participates and cares about the sport and the lifestyle. And somewhere, deep inside their corporate spreadsheets, we think that some of our vendors still care about the service we provide for them and the customers. And bottom line, we decide which brands are cool.”

    These issues will continue to brew…and frustrate many who are part of the indy skate/snow retailing community.

  2. Mikke,

    you have definitely said a mouthful!

    You have 5 action items on your list:

    1. We need a minimum of keystone margins initially on all snow hardgoods, including the cost of freight.
    2. We will pay for what we sell when we sell it.
    3. We can return unsold products at the end of the season.
    4. We need the ability to swap out product.
    5. We need mark-down dollars when box stores, chain stores and Internet vendors go off-price.

    Against these items are just a few huge issues:

    1) THE BIG BOX SHOPS:volumes can be found at the mass marketers and since some of these companies that you deal with are publically owned, they need to deliver BIG numbers. Hell, even the smaller vendors you deal with have massive marketing costs and targets to hit! Big box shops deliver these big numbers. But it hurts their relationship with the little guy.
    (ie YOU!)

    You want the margins but the vendors need the volumes…

    2) THE INTERNET: Internet shopping sites offer no real service, but exceptional depth of product. The fact is that many folks may go into a core shop, examine the equipment and then do more research on line…and eventually purchase on line. The fact is that some internet websites DON’T have to carry a huge amount of inventory. So while you can’t compare the experience of shopping on line to the experience of being in a real shop, many customers are voting with their mouse, their feet and their wallet.

    Independent book and record stores are two prime examples of what happens when an entire retailing market undergoes complete change…

    Will skate and snowboard shops suffer the same fate?

    The KEY thing that sticks out for me about what you wrote about is this:

    “We are the shops that make their products – especially their premium products – look good. We are the shops that give great customer service and we are the shops where the staff actually participates and cares about the sport and the lifestyle. And somewhere, deep inside their corporate spreadsheets, we think that some of our vendors still care about the service we provide for them and the customers. And bottom line, we decide which brands are cool.”

    These issues will continue to brew…and frustrate many who are part of the indy skate/snow retailing community.