It’s expensive. It’s tough to find a bed. And sales orders are almost a rarity. But the Outdoor Retailer show continues to work. “The first couple days have been electric from my perspective,” said Frank Hugelmeyer, president and CEO of OIA, on the third day of 2014 Outdoor Retailer Summer Market (ORSM). “We’ve got a 15 percent increase in exhibitors and had really terrific traffic out on the floor. The show continues to grow and be really healthy.”
Like several others, Hugelmeyer felt that after a few unseasonably warm winters, the late spring helped clear winter inventories to place many retailers into healthy open-to-buy positions. Added Hugelmeyer, “Obviously, some sectors were hurt by the later start to spring. But after the last several years of slower winters, having a strong winter with a long clean-out was very healthy for the industry.”
But the health of the industry was also not only evident by the innovation and new approaches showcased at the booths of established outdoor brands but also many non-traditional outdoor segments and new brands seeking a spot at the show. About 200 new exhibitors arrive at the show each year.
“We’re seeing a lot of new sectors, a lot of innovation, a lot of diverse product, and people are rethinking their businesses based on the new consumer right now,” said Hugelmeyer. “And I think that’s healthy. So I’m bullish on where the industry is going. I think we’ve got a lot of upside still in front of us.”
The 15 percent hike in exhibitors was a preliminary figure but a strong sign of the attractiveness of the outdoor and active lifestyle space to a number of increasingly varied sectors and categories.
“We have gained each of the past three years double digits or nearly double digits, so this result so far is not unexpected,” said Kenji Haroutunian, Nielsen Expo Outdoor Group VP and OR Show director.
LIGHTER TRAFFIC FROM INDEPENDENTS
On the somewhat disappointing side, preliminary figures through day two were indicating that the attendance at the show in key categories of retail buyer, distributor and working media was “running pretty parallel – flat or level” with last year’s numbers.
Haroutunian said many new buyers and stores but also several small brick & mortar shops stayed home this time.
“Even though the industry is growing in a healthy way, the small independent shop who is not participating in online commerce is struggling,” said Haroutunian. “This is born out by the OIA Vantage Point research YTD (from the June report). We are, more than ever, looking for ways to bolster the independent specialty stores, via content presentations and inspiring trend and product discovery areas.”
But for attendees, the show by all accounts continued to be productive. The action continues to be less around signing orders and more around relationship building and finding new ideas.
“Discovering new products, categories and brands to buy and watch is very high priority, along with networking and new business partnership potential,” agreed Haroutunian. “Order writing certainly happens – especially in accessories and at-once fall and holiday items, but the strategic alignment with brands and category stories beyond the next delivery window is more important than ever for retailers attending OR.”
“There’s tons of energy around newness and tons of energy around freshness,” said Joe Craig, VP of U.S. apparel sales, Columbia Sportswear, who said he’s been coming to the show since it was held in Reno in the early nineties. “We’ve had a lot of media attention and a lot of action in the booth from specialty retailers. It’s always good to see that.”
“There’s always a lot of energy here,” concurred Todd Spaletto, president of The North Face. “I always say that any time you’re able to combine your professional passion with your personal passion, a lot of good things happen and this industry really embodies that.”
Indeed, the hangdog looks and notably lighter attendance right after the Great Recession’s start in 2008 are gone. To many retailers and vendors interviewed by the B.O.S.S. Report, the mood notably picked up over last year’s ORSM. Some saw it as a sign that that the industry is more confident or at least more comfortable with the slowly improving economy.
EXTENDED WINTER SUPPORTS OPEN-TO-BUY
Many also felt spirits were lifted by a long winter season in most parts of the country after two consecutive dry ones.
“When you finish a winter strong like we did, retailers feel good about their inventory and they’re willing to bring in goods in anticipation of a good winter,” said Steve Couder, VP of sales, Implus outdoor division, which was showcasing its new DryGuy acquisition.
But he was particularly encouraged that Implus’ products including Yaktrax, ICEtrekkers and Little Hotties sold well in markets such as the Pacific Northwest, which had a subpar winter.
He believes Implus’ range benefits since they’re less lifestyle driven and more focusing on providing solutions to help people “make their lives better.” But he said the commitment to orders even in areas coming off a poor winter points to a confidence in the economy and industry. He added, “The last couple of years we might have heard retailers telling us they’re going to wait until the weather gets better. There’s less anxiety this year.”
“It’s very positive,” said Hi-Tec’s CEO Ed Van Wezel. Hi-Tec Spring 2015 line has over double the orders versus the prior year, including interest in its push into walking styles. “It’s nice to see the industry bouncing back after a few tough years. The sun is starting to rise again.”
“I think the mood seems pretty positive,” said Marc Angelo, senior director, merchandising, The Clymb, which operates theclymb.com. “I really enjoyed spending some time in the Pavilion. I saw some good energy out there. You always see some new brands. There’s a little bit more hustle going on there. And it’s nice to see brands that kind of live on the outside edges of the outdoor space seeing this as a good show to come to.”
Overall, Angelo admits that the industry is “not crushing it right now,” but the underlying solid fundamentals were evident across the major brands as well. Said Angelo, “People are still working hard and putting good product out there. There’s a lot of positivity here.”
“I think it’s heartening to see consistency year over year,” remarks Marc Berejka, director of government affairs for REI. “You see the same well-recognized brands coming in year after year back into their same old slot – though with new product. And depending on what product people have, you can find a fair amount of buzz at some of these booths.”
Berejka, who used to work at Microsoft, doesn’t believe the OR show should be counted on to deliver the front-page innovation stories like the Consumer Electronics Show. But he believes innovation continues to drive the industry. He pointed to the “swarm of people” he saw at the North Face booth as well as the ongoing presence of newer categories, marked by a expansion of Goal Zero’s booth. Particularly inspiring were the start-ups found in the Pavilion area. Said Berejka, “There’s all these one or two person entrepreneurial ventures just plugging away. It’s really fun to see the new ideas.”
Pointing to the number of fitness-related vendors also finding their way to the show over the last several years, Berejka believes the popularity of the show is a reflection of growing interest in being active. Said Berejka, “This may be me with rose colored glasses on but there’s greater consciousness about our individual and public health. And what is our industry about: It’s about making it easier and making it more fun to get outside and do something healthy.”
POCKETS OF INNOVATION ACROSS CATEGORIES
“It’s very vibrant this year,” said David Zimmer, owner of Fleet Feet Sports Chicago. “It has a lot of color and lot of splash but the product innovation continues to impress me on the footwear side but especially on the apparel side. Some of the fabrications that I’ve seen are pretty amazing. And the essentials or accessory category, especially on nutrition, are blown up at the show this year.”
With other running footwear trade shows, including Fleet Feet’s own show held in St. Louis in late June, Zimmer said the primary reason he comes to the OR show is to see innovations outside the run space.
“The number reason I come out here is for inspiration from categories we don’t live in,” said Zimmer. “Beyond the run and triathlon category, we want to know what’s happening in the standup padding community, what’s happening in the hiking community, what’s happening across different channels. And we take some of that and we look at the brands that we have and figure out how to look at the entire channel.”
Joe Butler, owner, Black Creek Outfitters in Jacksonville, FL, said, “Paddlesports is really important to us and there was a lot of good things in paddlesports. I’m very excited, specifically with Hobie, Jackson Kayaks and Aquabound.”
Fabrizio Zangrilli, director and guide at of Aspen Expeditions, the mountain guide service and shop at Aspen Highlands in Colorado, believes the industry is almost “too focused on innovation right now,” believing some apparel brands have to refocus on the basics of fit. He did find some “neat innovation” on the footwear side.
Charlie Williams, assistant manager and accountant at Grand Targhee Resort in Alta, WY, was impressed by the “ton of innovation,” particularly in the standup paddling area. He remarked, “I never thought it would blow up this big.”
Golden Harper, founder of Altra, the zero-drop shoe probably better known for its ample toe box, said Altra’s booth had crowds spilling into the aisles. He added, “We’ve got innovative, cool, new stuff and there doesn’t seem like there’s a ton of that out there – at least in the running space at the moment.”
BUYERS NARROW FOCUS
Keen’s Outdoor Business Unit Director Jeff Dill said the brand’s team had been prepped that show attendance “was going to be slower,” but the booth was consistently packed with both media and key retail account visits.
Dill noted that one prevailing theme that he’s heard from stores as well as from comments by friends at other brands was that buyers were in “edit to amplify mode,” or buying narrow in categories but buying those items in greater depth.
“A lot of guys are probably not being bought from and then some are completely sold out,” said Dill. “And some are saying whatever we’re selling, we’re selling a lot of.”
Josh Fairchilds, Oboz’s VP of development, agreed that stores appear to be buying narrower. He elaborated, “They’re cleaning their merchandise assortment and focusing more on core product and limiting their liabilities on the fringe side of things. Successful retailers are constantly evaluating what’s working and not working and making sure they’re shedding off not just product but brands that aren’t working for them.”
But he said Oboz’s business has been “very solid.” He adds, “I think a lot of that has to do with keeping a tight focus on our distribution channels and making sure that we’re protecting the brand and protecting our specialty retailer.”
Independent retailers are facing challenges not only against emerging online players but also expansion by brick & mortars like REI and hunt & fish giants such as Cabela’s, Bass Pro, Gander Mountain and Sportsman’s Warehouse impacting select categories. For both vendors and retailers, challenges continue addressing the aging demographic of outdoor enthusiasts, particularly hikers and campers.
With less-technical gear required for the day-hiker and for “glamping’ (glamour camping), some categories can become more commoditized. At the same time, strong trends toward active lifestyles and growing interest in connecting with the outdoors presents opportunities.
Fairchilds said one result is there’s less segmentation in the market. Brands are often targeting the same product toward a weekend dayhiker as well as the high-end backpacker. Said Fairchilds, “Everybody is just trying to figure out how to get their product on people who are just getting outdoors, no matter what they’re doing.”
Another shift many vendors seem to be embracing is no longer looking to convert younger consumers “to look like our traditional outdoor user,” but finding out what the outdoor experience means to them.
“I think it’s a shifting paradigm on what outdoor recreation is and to address that younger user,” said Fairchilds. “I think that’s what we have to identify: Where that paradigm is shifting.”
As far as the show, Fairchilds saw some eye-opening innovations around solar-charging devices and other electronics, but he believes it’s challenging to reinvent the wheel in many categories.
“We just don’t recreate new gadgets,” said Fairchilds,. “Because people use the product in such specific ways, it has be solid. For a shoe, if it doesn’t work, that’s a pretty massive failure because you’re not following it up with something four months later.”
Gregg Duffy, Timberland's senior director of outdoor performance, believes at least in footwear, buyers are looking for more “consistency” with the lessons learned from the minimalist craze. But he believes many retailers are also over-segmenting their lines, while admitting it’s challenging buying without segmentation.
“I just saw this retail buyer come in the booth and say, “Okay, what’s my young guy shoe and what’s my old guy shoe?’ But it’s just not a physical age thing. It’s a state of mind thing. It’s how young at heart are you. We have a classic boat shoe – which is old and stodgy that the 18-to-21 year-old crowd just loves in the U.S. But it’s also the hot shoe for the 54-year old in Europe. Seeking the youth consumer is an extremely tricky thing.”
Remarking on the ongoing success Timberland’s Yellow Boot is finding reaching the 7th and 8th year old boy, he believes the lesson for brands, at least, is to “stick to who you are and eventually the consumer will find you and adopt you.”
WORKING THE SHOW
As far as the OR show, one ongoing complaint was housing. Said one retailer, ”The show is good. Housing is a pain in the ass.”
But many seemed to also adjust to the accommodation circumstances. Said a vendor, “Park City isn’t a bad place to be.”
The extra days appear to provide some time to visit the Pavilion area and the B.O.S.S. Report found several buyers arriving on the third day. But complaints continued around the length of the show. One vendor said, “By the third day, vendors are standing around staring at each other.”
Probably the trickiest complaint is the timing of the show around orders. Aspen Expeditions’ buying, for instance, was done two weeks ago. Zangrilli said, “It’s costing retailers a considerable amount of money to come here. It’s costing manufacturers a ton to be here and deadlines are just moving forward and forward. Why are we here when I’ve seen all the product about six weeks ago?”
The reason he attends the show is primarily to make sure the colors and other details came in as expected. Said Zangrilli, “Every appointment is 20 minutes. I go through my order and just see what it is. If there’s no surprises, you walk on.”
Chris Miller, director of sales for Vasque, half-joked, “This is the most expensive show we go to and we will leave here without a single order.” But he said lead-times have been getting longer partly because of logistical challenges with more imported product coming into the country. He also said that while most companies used to work on “relatively-short time zones in terms of parts development,” Vasque and others are now working “2 years, 5 years, 10 years down the road” to try to stay on top of trends, also extending turnaround times.
And while noting that 2015 ORSM was a “quieter show trafficwise” than in the past, he still described the show as “fantastic” in terms of furthering relationships with retailers and pushing forward on its newer marketing initiatives designed to engage younger consumers to get outdoors. Those efforts involve collaboration with retailers as well as “cross-promoting with other like-minded brands,” Miller said.
But Vasque particularly heads to the show to stay up on trends, whether walking the show or conversing with the media and others. Said Miller, “It is a calendar race right now to be at the forefront with new product and a lot of times it’s one shade off in color that can mean the difference between a successful product and one that’s not going to make the cut. Even in hard goods now, fashion is a huge element.”
Peter Sachs, general manager for Lowa Boots, estimates the show’s about a “month late” from an ordering perspective. Lowa’s reps have been on the road since early June. Lowa still does line presentations at the show but much of the ordering is done. Sachs said, “It’s no longer a buy/sell deal like it used to be. The show is really a branding, marketing and relationship event. We spend an awful lot of time just talking to our customers on what’s working and what’s not, staying acquainted with each other, and trying to show them how we think product should be marketed or displayed. That’s really the overriding important aspect of the show.”
Overall, he agreed the mood of the show has been positive. Said Sachs, “It’s been a different year for a lot of dealers, probably mostly due to weather cycles and things that are sort of out of your control. So it’s changed some of the timing of what’s been sold a little bit. But overall I think most of our dealers have had a pretty good season.”
Brent Hollowell, VP of marketing at Nathan Sports, agreed the show’s largely around relationship building for the hydration and visibility specialist. Said Hollowell, “This is where we get a lot of business done around dedicated space, and programs to help train and educate the staff. We talk some in-season orders but it really goes into future planning.”
The show also helps Nathan quickly work with potential technology vendors on collaborations. Said Hollowell, “It can take five months to put together a meeting based on location and schedules. Here you can do ten little meetings in a day.”
Hollowell said Nathan’s booth was “jam packed the first two days” and felt busier than last spring and particularly 2014 ORWM, with people spilling into the aisles. He believes many outdoor stores are looking to capitalize on the strength Nathan is seeing with hydration in the run specialty channel. He said, “We were talking about it yesterday that we might have to expand upward or outward.”
Spaletto said most of North Face’s spring 15 orders are done, but the show gives North Face the opportunity “to connect with those buyers and say, ‘Here’s where we think there may be additional opportunity.’” On a broader and more critical scale, it provides opportunities for North Face’s top managers to meet with key accounts to “showcase the direction that we’re trying to take the brand.”
Through four key platforms – ThermoBall, FuseForm, its Ultra footwear series, and Mountain Athletics in their own way, North Face is looking “to connect to this overarching belief that we think outdoor is just getting faster, fresh and more social – that outdoor active kind of vibe.”
He mentioned a conversation he had with a retailer around how much the booth had changed over the last eight years, including “a ton of color” and sleek and “really fresh” designs – both targeting activities that have “a lot more adrenaline to them.”
The changes also address a shift whereby North Face used to plan its collections around buyer-specific needs but “today consumers are looking for us to tell them.” Spaletto offered ThermoBall’s strong reception as an example.
“It’s been a top-five selling style every week so far this year and it’s an insulated jacket,” said Spaletto. “It shows its year round versatility. But more so, what it shows is that if we can lock into these different drivers, we have an opportunity to lead consumers to what we think our big stories are.”
Overall, he said the continuing vibrancy of the OR show demonstrates “that the industry is looking to represent that broader definition of what outdoor can mean. And I think they’re seeing a lot of consumers coming into stores looking, acting and saying those types of things that we’re hopefully connecting with.”