The Outdoor Look is dead.
And that may be a good thing for the Outdoor Industry.
We all remember the day when every suburban kid was walking to class wearing a Mountain-light Jacket. It was a $300 2-ply Gore-Tex fashion statement, and the outdoor specialty shops couldnt order them fast enough. I remember re-stocking North Face Jackets daily at the local specialty retailer where I worked. Consumers latched on to an innovative product that was positioned at the top of the market when pop culture deemed outdoor hip.
But TNF did not go out to make a fashion-statement; they were trying to make a jacket that worked.
This is what differentiates the outdoor industry from others. Innovation is the key, and the outdoor consumer values function over form. The core consumer for the products we build and sell doesnt go away when business slows, because the lifestyle we — and they — embrace requires product — and tools — that help us perform at our peak.
We believe that even in this slow economy truly innovative companies can — and must — grow.
“Historically, the outdoor industry has always been counter-cyclical to the economy,” said John Cooley from Marmot. “People upgrade the quality and decrease the quantity of their discretionary purchases. Therefore, we thrive. That authentic emotional value-based brand vision, no matter how narrow, will drive customer loyalty.” Cooley places value on, “The ability to know your customer, listen closely, respond quickly, retain agility and take risks ”
Peter Metcalf, President of Black Diamond Equipment said, “In hard economic times, you can always go recreate in the local mountains The most wonderful aspect of our business is that our customers respond very well to innovation. If we want to ensure steady growth, we must ensure a steady stream of TRULY innovative new products.”
These companies dont innovate simply to capture market share, they innovate because they want to provide a better experience, and the intuitive consumer in our space knows and expects that when they buy their product.
Big or small, the companies that focus on developing products that improve the performance — and experience — of their customers are the ones that survive when the commodity companies built on “the look” fall off.
SEW reported earlier in the quarter that results at jeans mega-corporation VF Corp. were bolstered by the double-digit increase in sales at its The North Face unit. The company will invest more heavily in the TNF business going forward to support a growing specialty business as its commodity jeans and intimate businesses are challenged.
“Our customers have made us an integral part of their lifestyle,” said Mike Egeck, CEO of TNF. He points to the fact that even in a slower economy, the people buying outdoor gear truly live the outdoor lifestyle. “(Our customers) would have to see a dramatic change in personal lifestyle to pull back.” To capture this market companies need to produce equipment that improves the outdoor experience — at all levels.
We must always look for ways to expand our USER market that fuels the CONSUMER market. Paul Gagner from Gregory Packs said, “ because of the industrys reliance on product, we need to focus in this area (innovation). The key is to make innovations relevant, meaningful, and accessible to the middle of the pyramid, not just the top 5%.”
This keeps the entire market aspirational as users at each level look up the ladder for the “next new thing”.
Even Johnson Outdoors sees the advantage of innovation. While their Watercraft division saw down to flat sales, sales at Necky were up 11%, and was described by COO, Jerry Perkins as, “a true specialty and unique product higher end.” CEO Helen Johnson-Liepold said, “By focusing on innovation, new products that add more value to the experience, we are better positioned to overcome market softening ” New products are 27% of JOUT sales.
The companies who seem to be performing best are the ones who put their money behind innovation; the ones who remember why they started in the business in the first place. The ones that still get out there and hike, bike, climb, or paddle themselves, and then go back to the office thinking, You know, wouldnt it be cool if we could
So while pop culture says the outdoor look may be dead, the outdoor consumer is still alive and well. Theyre just out hiking the A.T. or climbing Cathedral Peak instead of hanging out in a mall. Now is the time to capture the market and mind share of the consumer. And when the cycle comes around again the companies that pushed the limits of materials, fit and function will be the ones who benefit the most.
And, oh yeah, sell a ton of product to college kids on their way to school…
