The C-Spot | CEO Ted Manning talks about Ibex's new Elite Dealer Program
Ibex CEO Ted Manning talks about balancing wholesale with direct-to-consumer business, having awkward conversations, and joining hands at what he feels is a “tipping point of tectonic change” within the outdoor industry. He also explains his company's decision to lean in at Outdoor Retailer and fight for public lands.
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Ted Manning got an early start in the outdoor industry, first pinning on an Eastern Mountain Sports name tag at age 17. Now the CEO of Ibex, Manning’s a far cry from that sales floor-roaming kid, but he’s yet to forget his roots.
In the past year, Ibex has worked to bridge the gap between its notoriously successful direct-to-consumer business and its involvement in the brick-and-mortar, independent specialty retail space. First the brand joined Locally.com, which connects online shoppers to local retail shops. Then, in November of 2016, Ibex announced its Elite Dealer program, a revenue-sharing framework designed to support independent specialty retailers. Elite Dealers will receive 10 percent of sales from direct online orders made within their areas, and each order will include referrals introducing customers to local Ibex retailers. Elite Dealers will also be privy to regional sales details.
It’s a noble gesture, but will it prove the antidote to specialty retail’s dwindling influence? Manning sat down with SNEWS to explain the initiative and talk big-picture plans and predictions for the future of the industry.
SNEWS: What is the Elite Dealer Program?
Ted Manning: It’s a way for Ibex to support independent specialty retail by providing access to aspects of our business that haven’t been made available before. The program allows the retailer to access information from our direct-to-consumer business, most specifically the top 20 styles by gender and month for the respective retailer’s region. The goal is to provide insight into what the consumers are buying and when they’re buying, but it’s also to shift the conversation and have a dialogue with the retailers about how we can mutually coexist in the marketplace.
SNEWS: Is this an invitation-only deal?
TM: There is an expectation that the retailer will support us in both seasons and meet minimum order thresholds, but there’s no cost to join. It’s not exclusive, which was pretty important to us. We didn’t want it to be something on a pedestal — we wanted the majority of our partners to engage in it in a way that was meaningful. “Elite” simply refers to the level and quality of the relationships and partnerships we are striving for.
If interested, a retailer can approach us directly or approach their local Ibex rep who, supported by Ibex sales leadership, will make the final determination as to whom we select to move forward with. To the best of my knowledge, we have not turned any retailers down.
SNEWS: You have a lot of experience in the retail world through your 18 years at Eastern Mountain Sports. Did that impact your decision to reach out to retailers in this way?
TM: I loved and I am proud of my time at EMS, and that’s where I really found a connection to the outdoor industry. I was motivated by being around like-minded people creating opportunity to get others outside.
Through the lens of my time there and in the industry, Ibex and I have come to firmly believe that the landscape of our industry is not made better in the erosion of independent specialty retail. We’re not better if one aspect dries up or becomes disproportionately strong. We really believe we’re healthiest when consumers have the choice to engage brands across a broad landscape.
We also believe that businesses have an obligation to create vibrant and sustainable communities. That’s inside of business and outside of business, from our supply chain partners to our local women’s shelters to our retail partners of all types.
The diversity of our industry is a source of its strength.
SNEWS: Last year, SNEWS had a retailer write an op-ed calling out brands that offer direct-to-consumer deals that independent specialty shops can’t compete with. He mentioned Ibex specifically. Does the Elite Dealer program arrive in response to that feedback?
TM: We’re highly aware of the op-ed and of the feedback of our reps and retail partners, and we invite it. We have another partner in Durango, and we know our direct-to-consumer business really pisses him off. He lights us up every chance he gets, and those conversations are really awkward and uncomfortable. And I really appreciate them.
The retail landscape is shifting rapidly, and we’ve got to figure out how to lean in because the changes are driven by the consumer, and if we retreat to our corners, we’re not going to get anywhere. But together, in those really awkward, uncomfortable dialogues, is our opportunity to learn and our ability to create the change that is necessary to move forward.
SNEWS: How did you get to the point where retailers felt the DTC business had gotten out of hand?
TM: We’ve always been aware [of the effects of our direct-to-consumer business on retailers], but I think as more pressures are put on the industry as a whole — whether it’s bankruptcies or the absence of winter or local macroeconomic conditions — we all start to look for what’s wrong. There are a number of reactions when pressures are put on a business: People tend to separate and run away, businesses fail — we’ve certainly see plenty of that lately — and the small aggravations can be amplified to become large aggravations. Through all of that, we become aware of problems that didn’t seem as big before.
SNEWS: How do you plan to balance your successful DTC business with these renewed efforts to expand your wholesale business?
TM: It’s definitely a balancing act. It’s hard to fight against convenience and one-click opportunities, and I firmly believe in the value that that business provides for us, but I also believe in the value of our relationship with specialty retailers.
The Elite Dealer program isn’t a fire-and-forget. We put the program out in the marketplace and cased a number of folks on it, and the response has been really positive. Now our goal is to continue the dialogue and the commitment to listening, learning, and adapting until we eventually find that balance.
SNEWS: Plenty of vendors are trying to boost specialty retail, but consumers still seem to be asking for online convenience. Do you ever feel like you’re fighting an uphill battle?
TM: I think you have to play the long game. I don’t think the next few years are going to be easy. There’s no silver-bullet solution. I think there’s going to be more need to engage one another in the spirit of supporting brands and supporting partnerships and finding a path to the consumer. I think we need to be ready to adapt and adapt quickly.
SNEWS: What does the future of the retail climate in the outdoor industry look like from where you’re standing?
TM: I think the crystal ball is broken for a lot of us. We are at a tipping point of tectonic change. The forces at play both inside and outside our industry are epic. That’s why we need to make sure we’re sound in our commitment to our partners, we’re as supportive as possible, and we’re listening in depth. Because we don’t know what we don’t know, so we better be ready to hear it and make changes fairly quickly.
I think we still have to find ways to overcome the power of convenience with a deeper value base. The consumer is clearly rejecting mediocrity, and that can be seen in the landscape of bankruptcies that are behind us. I think the macro socioeconomics that are being driven currently from Washington D.C. create threats that we all need to get together respond to.
I also don’t believe our industry is done with consolidation from either the retail or the vendor side. And I think part of that is healthy. We’ve got to learn to make less, and we all need to learn to redefine success. Maybe it’s not expecting 30 percent growth. Maybe it’s three percent and healthy businesses. A major driving factor of promotional issues and channel friction in our industry is the inherent pressures excess inventories create.
SNEWS: Is the goal of Elite Dealer program to push the conversation forward to inspire other brands to adopt similar programs?
TM: We’re aware that there is an opportunity for other brands to watch what we’re doing, but it isn’t about that. It’s about saying that this is the way we’re going to act in our relationships. It’s about a commitment to each other and our partners more than it’s about influencing the industry. If we are, that’s wonderful, and we’d be proud to play that role, but this is fundamentally about the way we perceive our world, the way we want to act in it, and how we hope to share the future.
SNEWS: You’ve announced that Ibex is taking a unique—and slightly disruptive stance—on the issue of whether to attend summer OR. Tell us how you came to that decision and your hopes regarding the outcome.
TM: We reached our decision by bringing the conversation back to the fundamentals of our brand–four core values which act as guardrails our brand uses to respond to issues:
1) Make great products
2) Take care of those around us
3) Treat our animals well
4) Protect our outdoor spaces
To us, the decision to stay or leave OR pivoted around numbers 2 and 4. We needed to find an option that would allow us to keep supporting the people within our outdoor community, and also to actively defend public lands. It wasn’t a question of whether or not to act; we expected action from ourselves.
We knew our path would need to keep us supporting the organizations with which we we partner in our commitment to conservation. By not attending OR, it would be much harder for Ibex to connect with these partner organizations, and much harder for us to add our voice to the collective. So, we decided to stay.
We never set out to be disruptive. Our intention was and is to represent the values of our brand in all of our actions. We respect and appreciate the decision of some brands to leave the show and understand that they feel they can make the biggest impact by pulling out and taking their voices elsewhere to be heard. We felt differently. Our intention at Ibex is to stay engaged and use the brand’s voice to defend our public lands and the economic engines they support. We hope to demonstrate that there is a way to protest the actions of the state of Utah while staying with Outdoor Retailer.