The industry’s traditional seasonal calendar has been upended by changing consumer buying habits, retail strategies, weather patterns, product cycles and trade-show schedules. In which direction should brands and retailers go?
By David Clucas
In November 2016 … The thermometer read 70 degrees throughout much of the country. Retailers were hawking fleeces, puffies and winter boots. Vendors were taking next winter’s orders before the first snowflake of this season ever fell. And the industry’s trade shows were leapfrogging their future summer and winter trade shows into the spring and fall. All the while, consumers were still back-to-school shopping.
It doesn’t take a rocket scientist to assess the situation — the active-lifestyle industry is out of sync.
In what’s largely been a rush to reduce risks and costs, the industry has lost one of the most valuable business tools — flexibility. That’s especially needed in a predominantly weather-dependent winter. To put it another way, instead of properly layering for adaptability on a cold-weather hike, we’ve stubbornly put on nothing but an expedition-weight parka and barreled out the door determined that snow will appear when we want it to. In reality, we’re destined for a sweaty, chill-inducing, miserable experience.
Why? Aren’t we smarter than this?
To diagnose and begin to solve the issue, the industry must come to terms with some new realities, including big shifts in consumer shopping habits, retail strategies, weather patterns, product cycles and trade-show schedules.
The ultimate driver of all change is the consumer, who is rapidly moving ahead — whether the industry chooses to catch up or not — thanks in large part to the technology at their fingertips.
“The customer is becoming accustomed to on-demand everything,” said Mike Massey, owner of Massey’s Outfitters in Louisiana. “Uber, Airbnb, OpenTable … they’re all about providing services and products at the last second. Why should people expect anything different from retail?”
To that end, Massey and many other industry retailers and brands — from The North Face to Deckers Brands — are reporting what’s being called the “buy-now, wear-now” trend. Simply put, consumers are purchasing products closer to their time of need. They buy winter jackets when it gets cold, instead of planning ahead in September when the products typically start hitting retail shelves.
The shopping strategy, while nerve-racking for retailers, is a boon for consumers. First, it gives them great flexibility — a must for today’s on-the-fly society. Shoppers can wait to see if it ever gets cold, or if their friends decide on that ski trip or not. Better yet, when the consumer is finally ready to make the purchase, the jacket is likely on sale after sitting on the shelves for months. And there’s no fear in finding the right size and color — the entire internet is their stockroom.
There’s nothing but upside — consumers have been trained to wait.
Even with something as sure as the back-to-school season (you can guarantee kids are back in the classroom by early September) students and their families are delaying their purchases. Why? To wait and see what the other kids are wearing, of course. Then they can choose the right styles to buy on demand.
Even for retailers effectively filling that demand, the reality has come with significant extra costs, particularity in logistics — constantly shifting products across the country, not to mention the environmental costs of all that transporting, Massey said. To help with some of those logistics, Massey formed Locally.com, a growing service helping match consumers’ online demand for outdoor goods with local store inventories. That’s one advantage local brick-and-mortar retailers have: Some consumers are delaying their purchases to the literal last minute, meaning they can’t wait for online shipping — they need to find a local store that has it now.
Retailers are reacting to consumers with shifts of their own.
“They’re placing fewer orders in advance of the season, and instead are preferring to make in-season orders once they have a clearer read on seasonal trends,” said Dave Powers, president and CEO of Deckers Brands. “Retailers can no longer fill their stores in late August or early September with fall product and expect to sell-through their assortment if the weather is warm.”
“It’s less pre-season and more in-season,” Massey echoed, adding that the same strategy goes for which products are hitting the retail floor. “We used to bring out the skis as early as July; now, it might be as late as January, depending on the weather.”
Retailers are also learning to shift merchandising strategies, beyond just always lowering the price. That comes thanks to growing consumer databases — albeit a big investment — paying off in the form of targeted marketing campaigns with the right incentives at the right time for the right customers. Getting a handle on inventory data will help, too. If a retailer knows that a 2016 running shoe model is low in stock nationwide, there’s little reason to discount it. Even if the 2017s are around the corner, someone will prefer the 2016 and seek it out. The airlines have figured out supply-and-demand pricing — so should we.
Vendors and brands are beginning to react to shifting consumers and retailers, but it’s been a slow process. The big problem is that up until now, brands have been pushing hard in the opposite direction.
The realities of overseas manufacturing have created a juggernaut of long lead times and earlier wholesale order deadlines. Concept-to-shelf times run more than two years in some cases, frequently falling out of touch with current consumer demands and fashions.
In response, a new niche of Made-in-the-USA brands and techniques are flourishing with greater flexibility and reduced production times, but the segment is still a very thin slice of the pie. New technology and machinery, plus new trade policies, may soon ramp up U.S. and made-in-market manufacturing, but in the meantime, brands are eyeing broader strategies to stay relevant.
One answer comes in the form of “rolling launch strategies outside the traditional calendar,” said Eric Greene, general manager for Exxel Outdoors’ Performance Outdoor Group. The idea is that brands will push outside the boundaries of just launching product on the spring/summer and fall/winter timetable.
Powers at Deckers echoed the move: “Brands must design and develop year-round product, improve the way they forecast and plan their inventory and optimize their development calendar so it is as close to market as possible,” he said. Even Deckers’ Ugg brand, typically worn when the weather is colder, is shifting to expand its year-round product, Powers said. “Today we release product multiple times a year and offer a more diversified assortment.”
Shifting Trade Shows
While consumers and retailers are moving closer to in-season schedules, it’s curious to see the industry’s major trade shows moving the other way. It suggests that brands aren’t quite ready to give up on their push for earlier order deadlines.
In November 2016, Outdoor Retailer announced it would move its annual summer and winter trade shows up nearly two months — Summer Market to June, Winter Market to November. The shift literally moves the shows out of their respective seasons — into spring and fall.
The move was inevitable as the trade shows saw more of their attendees conducting business at earlier events such as Grassroots. A global peer, the OutDoor show in Germany, moved its summer show to June as well. It’s all a response to those long lead times in manufacturing, said Darrell Denney, executive vice president of Emerald Expositions, which owns and operates the shows in conjunction with the Outdoor Industry Association.
“Sourcing internationally has become more rigid,” he said. So has pressure on company managers to get orders in. “In the past, even two years ago, the directive was to have 70 percent of orders in before production. Now it’s 90 percent,” he said. “Everyone is looking to reduce risk.”
Outdoor Retailer Show Director Marisa Nicholson acknowledges that retailers are pushing back against the earlier order deadlines. Still, she said, earlier trade shows can provide both sides better intel and feedback, even if those orders come down the road. “The one thing retailers can agree on is that it will be nice to see the entirety of the industry in one place when they are making decisions,” she said.
There are still fractures when it comes to the trade shows. While Emerald officials said they opened discussions to other players, such the Snowsports Industries Association and paddlesports groups, representatives for both said meetings were more directive than discussion oriented.
“One glass of wine to tell us ‘here’s what we’re going to do’ is not progress,” said SIA President Nick Sargent. “There has to be a real desire to achieve a solution that’s in the best interest of the entire industry.”
Ultimately, Mother Nature may have the biggest shift in store.
There’s little debate that a warming planet presents big challenges for the industry. But there’s less discussion around the many forms of climate change, including what seems like winters that come later in the season.
Our colleagues at SSI Data, powered by SportsOneSource, have noticed this trend in the retail sales figures. While total winter jackets sold will always be the greatest during the weeks leading up to Christmas — snow or not — the biggest unit sales bumps (versus the average) over the past few years have come after the holidays, during January, February and March … even April. You don’t see the change as much in dollars, because most all cold-weather product is discounted by then, but it proves earlier points that consumers are waiting for the cold to hit and getting good deals to boot.
Which brings us back to the traditional seasonal calendar. Winter doesn’t officially begin until December 21 and it doesn’t officially end until March 20, yet we expect two feet of snow and sub-zero temps the day after Halloween. Or we crow if it isn’t beach weather by March 1.
Perhaps the best shift we can make is moving the holidays to February.
This story appears in the Winter 2017 SGB Magazine, publishing next week. Snag your print copy at Outdoor Retailer Winter Market by visiting the SportsOneSource booth (#100).