By David Clucas

Two of the bigger themes to come out of the 2016 Outdoor Industry Association Rendezvous event in Denver this past week were how the industry is dealing with both economic and technological hurdles.

On the technology front, how to use the growing amount of “big data” in a personalized way was a main topic, while on the economic front, financial concerns in China as well as how the U.S. Department of Labor’s new overtime rule would affect the company pocketbook were front and center.

Technology’s Story
Outdoor brands and retailers will have to address technology’s presence in a much more dedicated way, presenters told attendees.

“This is beyond just putting up monitors on your retail walls,” said Jill Nickels, studio director at Gensler, an integrated architecture, design, planning and consulting firm. “Brick-and-mortar is not dead, but it has to adapt.”

And technology doesn’t mean becoming impersonal. The focus for the outdoor industry should be using the technology to share its great stories, said Mary Burns, director of retail at the Walt Disney Co. “It begins with the story…it can be a person, an attraction or an experience that builds that emotional tie. They have to know the story, they have to live and breathe it. It’s not about giving product away, it’s about immersing them into the experience.”

And while the consumer gets to know your business, use technology to get to know them, said Ruth Graham, senior client strategist at Intersection, a media and technology firm. She pointed to customer-service consumer databases that can inform anyone who picks up the phone the customer’s past history, how many times they called and what they’ve ordered in the past — online or in-store. While it sounds like “big brother,” customers have come to expect that kind of personalized service.

“Time is currency,” Burns added, noting customers don’t want to waste time having to retell their history, needs or concerns over and over again.

Technology is also allowing retailers to open up their shop floors — more space for experiences and less space for product, Graham said. The product selection might still be there, but it’s organized and findable via a mobile POS system — either in the back of the store or at a warehouse, which can then be shipped to the customer.

How do you implement all the new technology? “Get it up and ugly, then gain valuable consumer feedback,” Graham said. The technology evolves too fast to wait.

“Don’t worry about making it perfect,” added Barry Bourbon, retail practice area leader and principal at Gensler. “We’re seeing a lot more lab-type and pop-up stores, which is a great way to test concepts.” He added that if the business has a fleet of stores, think about making several of them different from the others — one could be more experiential, while another could be focused on fulfillment.

In the end, always view technology as an enhancement, not a replacement for the human touch, Nickles said. “This isn’t about eliminating your customer service, but enabling them to do better.”

Keep An Eye On China
Richard Wobbekind, executive director of the business research division at the University of Colorado Leeds School of Business, provided attendees with an economic outlook for the next year, saying the Chinese economy, the U.S. election, Brexit and the fluctuating oil markets were the top risks heading into the new year.

“Far and away, China is the No. 1 issue,” Wobbekind said, noting that country’s government-controlled economy can be a tough read. “The growth rate has come down from double digits to 6.7 percent, but in reality it’s probably more like 4 percent,” he said.

At the same time, many U.S. brands are looking to China as the next big opportunity for customer growth.

The U.S. presidential election result will bring obvious differences with a Clinton or Trump victory, but probably none bigger for the industry than global trade, Wobbekind said. He suspects that a Clinton victory would likely mean trade deals like the Trans Pacific Partnership would move forward, but probably not within the first year of her term.

Overall, Wobbekind sees U.S. gross domestic product growing between 2 and 3 percent in 2017, with European and Asian growth slowing and Latin American economies falling. Emerging countries will show the strongest growth.

On the U.S. consumer front, incomes are finally starting to rise, but the widening wage gap is still a big concern, he said. And while overall American household debt has dropped (in large part due to the recovering housing market and low interest rates), there is concern with younger generations holding more debt than they ever have with student loans.

“Unlike their parents, they haven’t had the savings or investments to supplement the years of stagnant wages,” Wobbekind said. “Instead, they’ve gone deeper into debt. Eight years of zero interest rates makes this young generation think money is free. That’s not a good thing.”

Overtime Rule Two Months Away
Upcoming new rules that might raise some of those wages got plenty of attention at OIA Rendezvous as well.

Lori Kleiman, president of HR Topics, a human-resources consulting firm, said the updated Fair Labor Standards Act rules on overtime pay will go into effect on December 1. The main change in the rule is that employees will now need to make at least an annual salary of $47,476 to be exempt from overtime pay if they work more than 40 hours a week. The move nearly doubles the old minimum and is an attempt by the government to address businesses “promoting” their employees to lower-paying salaried positions and then working them many overtime hours.

Businesses have several options in addressing the new rule, including:

  • Keeping the employee below the minimum, but limiting their work to 40 hours per week.
  • Keeping the employee below the minimum, but tracking their overtime hours and pay time-and-a-half based off their annual salary.
  • Changing the employee to hourly wages, tracking all their hours, and paying overtime for more than 40 hours per week.
  • Raising the employee’s annual salary to more than $47,476 per year to avoid overtime pay.

Even if the latter route is chosen, Kleiman noted there’s also still a means test to the work that employee does to be exempt from overtime pay.

Photo by David Clucas — From left, Ruth Graham, Mary Burns and Barry Bourbon speaking at OIA Rendezvous.