STATE OF THE INDUSTRM REPORT - Outdoor Industry Association

The future of outdoor retail will hinge on retailers’ ability to meet the consumer
where he or she is. Some people value their gear for its functionality, others
for the potential it inspires. Still others are simply looking for a bargain. All
want retailers to partner with them in fulfilling their active lifestyle aspirations,
whatever they may be. But what will that look like in the individual distribution
channels? Veteran Industry retailers have differing opinions. Here’s what some
of them see:
Specialty retail: the mojo
Specialty retailers, repositories of sport-specific experience, traditionally helped
consumers “belong” by facilitating an exchange of knowledge and a good
outdoor vibe along with the cash they charged. For a passionate and plugged
in consumer who cared about brands and products, that was valuable. “In
the old days shops were the community centers,” says Sally McCoy of Silver
Steep Partners, a financial advisory/consulting firm specializing in the outdoor
and active lifestyle industries. But now that outdoor chat rooms and forums
provide information on even the most obscure backcountry areas, the locus
of expertise has shifted. “Consumers have turned their focus to destinations,”
says McCoy. Specialty retailers must establish their relevance by developing
inclusive and trusting relationships with customers. Cabela’s CEO Dennis Highby
thinks expanding beyond the traditional storefront is the best way to do that. “Our
multi-channel approach gives us a tremendous advantage over competitors,” he
says. “All our business segments—retail, direct and financial services—build on
each other.”
“i get most of my input from non-industry companies.
consumers’ expectations are formed at Banana
republic or Whole foods.”— matt hyde of rei
The result is a tailored brand experience that’s convenient and meaningful
for a consumer who is pressed for time and increasingly interested in the
lifestyle aspect of their sport or activity. Other specialty retailers agree. “Our
greatest strength is one-on-one interaction with the customer,” says John
Mead, President of Adventure 16, a specialty retail chain in southern California.
“However, these days customers expect to see an Internet presence. For us not
to be on the Web is an inconvenience to our customers.” Beyond convenience,
the multi-channel approach equals customer service. With so much competition
that’s a crucial priority. Demands on outdoor retailers are increasingly driven
by excellent retailers outside the Industry. “I get most of my input from nonindustry
companies,” says Hyde. “Consumers’ expectations are formed at
Banana Republic or Whole Foods.”
For specialty retailers, developing brand value depends on increasing the quality,
not the frequency, of customer interactions. A specialty store’s Internet site can
act as a virtual water cooler, for example, where enthusiasts from around the
world compare notes and share adventure stories. Catalogs can offer sportspecific
tips and the latest outdoor news. It’s all about reestablishing a sense
of inclusiveness and belonging. Specialty retailers are at their best when they
foster community.
// www.outdoorindustry.org
% of Respondents
online sales projected to take off
Sales of outdoor product through the Internet grew
considerably between August ’04 and July ’05 from
12% to 16.3% of all outdoor product sales.
According to Forrester Research, Inc., total online US
retail sales are projected to grow at a compounded
annual growth rate (CAGR) of 14% over the next five
years (fig. 1.) while the two main outdoor categories,
equipment and apparel, are expected to grow at 16%.
Industry veterans agree—70% of respondents to a
recent online survey predicted the ‘Net to grow 10%
or more in the coming year, and 28% saw growth of
20% or more (fig. 2).
Apparel
16% CAGR
16% CAGR
Sporting Goods Equipment
Source “US eCommerce: 2005 to 2010,” Forrester Research, Inc.,
by Carrie Johnson with Brian Tesch, September 14, 2005
Internet Sales Growth Percentage 2006
Source Outdoor Industry Association online survey of 210 industry
professionals from member companies conducted December 2005.