Today, outdoor specialty shops have to offer a lot more than e-commerce and direct-to-consumer (DTC) businesses, as well as manage to be profitable while selling the same products as their competitors. Along with this challenge, the businesses are tugged this way and that by responsibilities to employees, customers, vendors and community.
These retailers are facing more struggles than ever before with the rising cost of doing business, including higher wages and cost of benefits, smaller brand discounts stemming from unattainable growth-oriented incentives, and wider product distribution via the web, resuling in the proliferation of discounted merchandise.
SNEWS talked with a group of successful outdoor retailers about 3 of the biggest challenges they face today and how to mitigate those challenges in the most responsible manner possible:
1. Treating staff members responsibly
Wild Iris Mountain Sports in Wyoming has endured a rough patch in hiring the last 18 to 20 months. As you know, hiring demands a lot of time and energy that eats away at the time needed to keep up the day-to-day details of the business.
According to Dana Davis of Summit Hut, you must be a “good employer” if you want to hire quality staff. While employers want to offer competitive benefits such as health insurance and paid time off—which gives small retailers an advantage—with margins decreasing, it’s hard for payroll to keep up. Davis admits that her own store has been forced to cut back on employee-appreciation party budgets and other fun staff perks.
What retailers can do:
“When budgets get tight, invest more time into your staff by teaching them different elements of running a small business that go beyond the day-to-day floor tasks, says Davis.
You might discuss buying strategy, budgets, the costs of doing business, and sales reports, for example. Your staff won’t find many other employers willing to teach them about how a business works at a larger company where the culture is more about getting the job done.
“Sharing your knowledge of business will show your team that you are invested in their growth even when cash flow may make raises or bonuses more challenging.”
2. Maintaining a responsible relationship with vendors
Maintaining symbiotic vendor/retailer relationships means paying vendors on time. “They are the bedrock of specialty retail as shops rely on access to quality products and vendors need specialty shops to introduce new products to the market,” points out SNEWS.
Unfortunately, the DTC strategies of brands like Patagonia, prAna, and many others opening up their own branded brick-and-mortar locations are making many retailers view vendors as competitors.
Some outdoor specialty shops feel that the “irresponsible, growth-oriented incentives” brands are now pushing encourage retailers to overbuy. In fact, David Polivy of Tahoe Mountain Sports recently met with sports equipment manufacturer,Salomon, and was told that they expected their retailers to grow 15 percent year over year.
“These types of growth initiatives are not healthy or even realistic,” says Polivy. “. . . High sales growth projections seem to create uncertainty from season to season and make it hard to keep strong partnerships.”
What retailers can do:
“It’s our responsibility to keep our vendors honest and keep them with as much skin in the game as we have,” remarks Polivy.
To make it happen, retailers will need to have open, honest, and consistent dialogue with reps and brands in order to help vendors understand the evolving challenges of specialty retailers.
Retailers should also try buying less. Because brands are accessible on more platforms these days, the demand for product is not the same as it once was.
“The key point retailers need to convey to brands and reps is that to stay nimble, they need less on-hand inventory so that they can follow in-season trends in today’s fast-paced market.”
3. Acting responsibility in the community
“Specialty shops are one of the first places people go to get the quality gear, education, shopping experiences, and community they need to explore and enjoy the outdoors,” says SNEWS.
With the almost endless number of choices in today’s market, the buying process has become more difficult for retailers as they try to curate a product selection tailored to their respective communities.
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