Industry News

Preparing for the Future

June 6, 2016 | 0 Comments

Brands and Retailers Reflect on the 2015-2016 Season and the Challenges and Opportunities that Lie Ahead

Photo_1-11.jpgOwen Leeper takes the express flight. Photo by Tyler Horne and compliments of Icelantic.

When the snow falls, cash registers ring. And when it doesn’t, the struggles that retailers face are compounded. On the heels of the 2015-2016 season, brands and retailers often emphasize this simple reality. Though the season has just ended, they’re working to address the challenges and opportunities that lie ahead.

East of the Rockies, warm temperatures and a dearth of snow led to a sharp drop in snow sports sales. Compared to the same time period during the preceding winter, sales from August 2015 to February 2016 declined in the Midwest by 17% in units sold and 13.5% in dollars sold. In the Northeast sales decreased 14.4% in units sold and 13.2% in dollars sold, and sales in the South declined 3.5% in units sold and 0.3% in dollars sold.

Thanks to plentiful snow, however, the West began to rebound from a string of lackluster winters. Sales in the region were up 9.3% in units sold and 14.9% in dollars sold. Due to its abundance of retailers, the West helped mitigate the drop in sales elsewhere. Consequently, snow sports sales across the U.S. dropped only 2.8% in units sold and 1% in dollars sold.

Photo_2-1.jpg

Nick Decicco had no problem finding snow this season. Photo by Aaron Dodds and compliments of Never Summer.

Weather is but one of the many challenges brands and retailers are currently facing. Even when resorts are blessed with ample snow, consumers tend to need additional proof before heading to the slopes. “Our greatest challenge was letting the average consumer know that there was a winter worth participating in despite there being no snow in the front yard all winter,” explains Jason Borgstede, owner of Blue and Gold Boardshop in Anchorage, Alaska.

While this may be an issue of perception for consumers, its impact is especially tangible for retailers. “Our opportunity to sell snow sports [equipment] is already a small window. When we lose weekends, then weeks, and then months of winter weather to record warmth, it becomes impossible to retrieve that lost revenue,” says Teddy Schiavoni, owner of Summit Ski and Snowboard in Framingham, Massachusetts.

According to evo Director of Merchandising, Brian Limoges, shifts in consumer behavior offer an additional challenge. “Despite the industry’s best efforts to kick off the ski and snowboard season in October or by Thanksgiving at the latest, consumers are shopping later and later in the traditional holiday time period.” Jason Watson, co-owner of Milosport in Auburn, California, notes that shifts in brand policies are also compromising the traditional sales window. As he explains, “Dates for MAP [minimum advertised price] policies have moved up, so realistically we have between November 1st and January 31st to sell product at full pop.”

Photo_3-2.jpg

Sammy Carlson enjoys some blue skies in Chile. Photo by Mackel Vaughn and compliments of Armada.

In regions plagued by a lack of snow and sales, retailers are approaching next season with caution and restraint. “We’re lowering our open-to-buy [budget] since lots of shops have higher than average inventories this year,” offers Joe Rauscher, owner and SKI-EO of Joe’s Sporting Goods. And while these increased inventories may be anchored to specific regions, their consequences are not. According to Matt Patton, co-owner of Tactics in Eugene, Oregon, the rise in e-commerce continues to lead to “the nationalization of the market online.”

While some shops are benefiting from this shift, many brick-and-mortar specialty retailers assert that the rise in e-commerce is compromising the health of the industry. According to Jay Moore, owner of World Boards in Bozeman, Montana, “issues of overproduction and improper distribution” are often fueled by e-commerce. Moore explains, “Snowboarding is a small industry and when commodity principals are applied to it, the money gets into the wrong hands and the internet [helps create] a race to the bottom.” He notes that direct-to-consumer sales in which “we share our customers with our vendors” further compound the problem.

SIA Director of Research, Kelly Davis, notes that more and more brands are opting for this omni-channel approach, selling their products directly, as well as through specialty retailers and chain stores. “It’s a difficult dance for everyone,” she offers. And the outcome of this dance is not the same for all parties. Online sales during August 2015 to February 2016 increased 6.7% in units sold and 3.8% in dollars sold compared to the same time period during the preceding winter. Sales at specialty retailers decreased 2.8% in units sold and 1.0% in dollars sold while chain sales dropped 5.6% in units sold and 5.1% in dollars sold. Nonetheless, “the highest percentage of goods in the snow sports market is still moved through specialty shops,” Davis explains. “But keep in mind that many, many specialty shops have a well developed e-commerce presence.”

 Photo_4-2.jpg

Chris Roach with a timeless method at Boreal. Photo by Sean Sullivan and compliments of Homeschool.

Even in the midst of a turbulent landscape, brands and retailers are working to envision a better future. “At the moment, there are a lot of opportunities out there despite the challenges,” offers Homeschool Founder and Creative Director Danny Clancey. These opportunities often involve strengthening relationships. For shops struggling with lagging sales in the Midwest and on the East Coast, “We decided to roll forward balances, as well as provide discount dollars to select dealers who have been strong partners,” offers Armada CEO Erik Snyder.

According to Mervin Manufacturing Marketing Manager Jesse Burtner, communication also plays an essential role in refining partnerships between shops and vendors. “Working closely with retail partners on perceived trends and sell-through is important,” he explains. “Getting out, riding with the shops, talking about board design, artists, and cultural movements help both us and shops react quicker to the ever-shifting landscape.”

While adapting to the diverse needs of their retail partners, brands are working to stay true to their roots. “Every dealer has its own particular culture, values, and method of selling and marketing,” explains DPS Founder Stephan Drake. “We have to be sensitive to each case and provide great skis and great service to each unique system while actively strategizing how to communicate the vibe of our brand to the customer in every buying scenario.”

In addition to strengthening their relationships with one another, brands and retailers are working to forge more meaningful connections with consumers. Borgstede notes that with his shop, “Lately, I’ve been looking deeper into where our successes have been and those successes seem to be in offering an experience and level of service that people can’t get anywhere else.” He cites avalanche awareness events, guest speakers, guided outings, and camps as examples.

 Photo_5-2.jpg

Rally the troops. Photo compliments of 686.

Both shops and vendors emphasize the importance of building a community that is as welcoming as it is inclusive. “As retailers, we have to think past our experience as core riders and understand the experience of the casual snowboarder,” explains Borgstede. “We have to see the hill through their eyes so we can understand how to welcome them into the fold and help them find the undying love for snowboarding that we have and that will make them lifers.”

As part of their efforts to make snow sports more inviting, brands and retailers are reaching out to families and younger riders. “We are seeing so many snowboarding families now—couples who met through snowboarding and who are now raising their own kids in the snowboarding world,” explains Never Summer Snow Sales Manager Mike Gagliardi. As a result, “There’s a demand for us to come up with [additional products] for kids.” Ben Olson, owner of Damage in Duluth, Minnesota, echoes these sentiments. “We saw more young snowboarders this season than ever,” he offers. “It’s important to get the young guns started early and shopping in the correct stores [that can effectively meet their needs].”

Shops and vendors assert that in addition to being inclusive, initiatives to increase participation need to address the rising costs associated with snow sports—especially the price of lift tickets. “We need to work together as an industry—manufacturers and resorts—to provide easier and more cost efficient ways for people to go snowboarding or skiing,” explains 686 Director of Marketing Brent Sandor.

 Photo_6.jpg

Kaylin Richardson dives in deep. Photo by Casey Day and compliments of Icelantic.

To better connect with consumers, both manufacturers and retailers are enhancing their game online—and seamlessly connecting it to their physical presence. “We are focusing more on telling our own story rather than relying on the retailer to do that for us and we’re reaching out and engaging our customers more directly through social media,” explains Clancey. For evo, efforts to strengthen its digital presence involve “blurring the lines between our web and in-store business,” explains Limoges. “We believe it is crucial to create authentic, relevant, and impactful experiences with our current and potential customers both online and in-store, and, perhaps more importantly, to draw a meaningful link between these two channels.”

As brands and retailers work to refine their collections, their efforts are shaping not only their products, but also how they approach their business. For Armada, “We’re simplifying our product family structure in the coming seasons, which means our line continues to get easier for retailers to sell and consumers to buy,” offers Snyder.

A number of brands are also investing heavily in research and development. To thrive in an ever-changing environment, “You have to stay on top of and be open to new technologies,” explains Niche Cofounder and Creative Director Ana Van Pelt. After two years of prototyping, Niche is working to introduce a new resin system, Recyclamine. “By using this resin, we will be able to have a full cradle-to-cradle, zero waste manufacturing solution,” Van Pelt explains. Similarly, Drake notes that one of the greatest opportunities for DPS is “investing heavily in research and development to make sure the product matches the ethos of the brand and exceeds expectations.” He explains that a commitment to innovation can fuel not only a company’s products, but also its culture. Drake asserts, “Great designs and a relentless pursuit of great skis present the opportunity to keep growing a unique culture around the brand.” 

Photo_7-2.jpg

Jonny Sischo sends it in Cooke City, Montana. Photo by Jordan Ingmire and compliments of Niche.

As much as brands are working to evolve their business by adapting to the current landscape of the industry, they’re also looking beyond it. “We are constantly surveying the retail landscape, consumer demands, products trends, and how they all play together,” explains Icelantic CEO Annelise Loevlie. “Maintaining this awareness in both the snow sports industry and outside it helps us respond to the waves we see coming.”

While all brands are susceptible to these waves, those that are nimble may be best equipped to endure and capitalize on them. “There is a huge opportunity to rethink retail for the rapidly changing market and to work with our retail partners to help do that,” offers Clancey. “One of the great things about being small is that we can be more flexible and perhaps move more quickly.”

According to Patton, small brands are increasingly being rewarded for this—and their ability to breathe life into the industry. “I’m excited to see us get traction with some small, new snowboard brands. We’ve always tried to support small brands, but in the past the customer really seemed focused on a few big ones,” he explains. “I think we’re seeing a shift in mindset which may not translate into a ton of dollars, but is a very healthy thing for the industry.”

 Photo_8-1.jpg

Nick Larson slashes the pipe. Photo by Micah Cook and compliments of Never Summer.

Despite the diversity of their efforts to brace for the future, many brands and retailers are united in their belief that change is needed. “Our industry needs reform throughout. All of the stakeholders need to become better business partners to each other—suppliers, retailers, resorts, reps, and media,” explains Schiavoni. “We all agree that we need to grow our sport to sustain the industry. We have to learn to work together, become better partners to each other, and deliver a clear message to the world that snow sports are worth committing yourself to.” In lieu of guaranteed snowfall, lean inventories, and crystal balls, such changes stand to be essential. Armed with strong partnerships and a unified front, brands and retailers can be better prepared to weather any storm—or lack thereof. Photo_9-1.jpgTodd Ligare hiking in Chile. Photo by Chris O’Connell and compliments of Armada.

Leave a Reply

Your email address will not be published.