Internet retailing clicks with outdoor consumers
In the world of pop music, substance has replaced pure style. Goodbye, Britney. Hello, Avril Lavigne. The same might be said for Internet commerce.
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In the world of pop music, substance has replaced pure style. Goodbye, Britney. Hello, Avril Lavigne. The same might be said for Internet commerce. Even though the bubble burst for flashy dot-coms, web sales are up for veteran outdoor retailers that have a solid foundation.
Some outdoor retailers use Internet sales to take up slack during tough economic times. Others have turned to the web to expand their business. And for some, web sales represent a significant portion of overall business.
“At this point (web sales are) surpassing retail store sales for us,” said Mark Carlstrom, owner of Northern Mountain Supply, a 28-year-old shop in Eureka, Calif. “We’re in a small town of about 128,000 people. We were just looking for an avenue for more sales due to our limited ability to gain sales locally.”
Business has grown so much that the 5,000-square-foot store now has a facility matching it in size to handle shipping and receiving for online business.
Jay Knick, owner of Sonoma Outfitters in Santa Rosa, Calif., said he launched a web component for his store three years ago to compete with an REI store that opened in his area. “I just didn’t want to open more stores,” said Knick. “I thought the Internet was a better alternative.”
Knick said that the web site accounts for a quarter of his business and boosts sales during tough times. “It really helped after September 11, until sales picked up again in November,” he said. “It also really helped us when sales started slowing down in May due to the economy.”
Despite the state of the economy, Internet sales are rising. A September 16 article in the Wall Street Journal said: Total online retail revenue in the U.S. is expected to jump 41 percent to $72.1 billion this year from $51.3 billion last year, according to Shop.org, the Washington-based online-shopping association of the National Retail Federation.
Reasons for Success
Mike Plante, owner of Travel Country Outdoors in Altamonte Springs, Fla., said his web retail business, launched six years ago, now attracts more of his local customers, as well as people who previously shopped through catalogs.
“They’ve come to the Internet because of convenience,” said Plante.
Carlstrom of Northern Mountain Supply agrees. “With busy lifestyles, people don’t have a lot of time to go shopping. A lot of our business comes from people shopping on their breaks, or at home after hours, and they’re just looking for an easy way to buy quality products,” he said.
Plante said that one advantage of the Internet is it allows retailers to reach a broader consumer base. “I think we’re learning the competitive advantage that REI and Campmor have had by shipping to smaller towns that lack quality outdoor stores,” he said.
It’s a Deal!
While the retailers we spoke with maintain retail prices on the Internet for in-line items, they’re really making hay with discounts.
Carlstrom said that Northern Mountain Supply has seen great success by partnering with manufacturers to move discontinued and slightly blemished products. In fact, these deals account for more than 60 percent of Northern Mountain’s Internets sales, he said.
Knick said that Internet deals help move clothing, which represents 70 percent of his business. “With clothing you always have a lot of end-of-year stuff, and it’s just a good way to get rid of it. We’ve had such a soft year in clothing, but when I put it on the Internet on sale, the orders really start coming in,” Knick said.
It’s difficult to determine whether softgoods or hardgoods sell best on the Internet. But Plante said that web sales reflect what happens in the store. “Hot sellers swing with whatever is selling on the floor,” he said. “Big backpacks are down (on the Internet) just as much as they are on the floor.”
According to the 2000/2001 OIA “State of the Industry Report,” 71 percent of stores surveyed have web sites, but only about 45 percent sell products online. Will that number likely increase?
The retailers we interviewed said that newcomers will find it difficult to break in. “It’s a tough one to buy into now,” said Carlstrom. “A lot of vendors are getting leery of upstart businesses, because the industry is down.”
Most successful Internet retailers rely on special partnerships with manufacturers — specifically “buy button” partnerships. On their web sites, manufacturers have buy buttons that link consumers to retailer web sites. In turn, retailers commit to carrying a significant portion of the line.
The manufacturers and retailers with buy button agreements typically have long histories of working together. “The impact of buy buttons is phenomenal. It drives business and economizes your advertising,” said Carlstrom. “But vendors don’t give them out very easily.”
Plenty of retailers are jockeying for position on manufacturers’ web sites, and it will be difficult for newcomers to squeeze in this late in the game.
Of course, web businesses already face an uphill battle. The Internet isn’t so new and the glimmer is gone. Just like those pop tarts on the Billboard charts will realize — good looks won’t guarantee you a bright future.