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Development is in the works at Grassroots Outdoor Alliance, a group of more than 80 independent outdoor retailers. President Rich Hill is driven by a desire to give independent stores the same resources and support that larger chains enjoy. He joins host Kristin Hostetter for a conversation about the new business and DEI tools Grassroots is excited about.
Watch the edited video interview here.
Read the Rich Hill transcript
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Kristin Hostetter: I’m Kristin Hostetter and you’re listening to the Straight Talk podcast by Outside Business Journal. I’m really excited about my guest today. Rich Hill is the president of Grassroots Outdoor Alliance and a long time friend of mine. Rich and I go way, way back. I first got to know him when he was VP of sales at Patagonia.
He’s done time at Ibex and prAna. In 2012, he founded a lifestyle camping brand called Ticla. It’s sadly folded after just two years, frankly, because I think it was just way ahead of its time. Rich went on to work at Compass & Nail, a consulting firm, and then he landed at Grassroots in summer 2016. And, as someone who has known Rich in all of these different roles, it really seems to me like he’s found a sweet spot with Grassroots. In case you don’t know, Grassroots Outdoor Alliance is a coalition of about a hundred independent outdoor specialty retail shops around the country.
They share data, they share resources, and they come together to help each other, navigate sea changes in the retail landscape. We’re going to talk about all of that plus a whole lot more.
How are you doing out there in Ventura, Rich?
Rich Hill: We’re doing great. It’s a little foggy this morning, looking out at the window from the house, but we’re doing really well here.
Kristin Hostetter: Awesome. Thanks for making time to talk with me this morning. Lots of stuff going on at Grassroots these days, right? You guys just added a bunch of new retailers to the organization. What does that mean for the organization?
Rich Hill: It’s been interesting because we put out that press release that we landed 10 new members into the group and it’s been part of our plan since I got here three and a half years ago. It’s just a continuation of what we started years ago. And we’ve been on this progress, but this one seems to have landed in a way where we seem to have moved into another realm of size. We’re now in 45 stores, we have 187 locations.
And there’s something about this new goal that we hit that has put us in a new realm with people of size and coverage, and it’s exciting. And we didn’t even see it that way. It was the response after the word got out.
Kristin Hostetter: So now with 187 locations that makes you guys collectively bigger than REI, right?
Rich Hill: Yeah, by physical locations. Not by dollars, dramatically smaller in dollars, but you’re right. We’re in more states, we have better coverage. And yeah, it’s super exciting. We got somebody in Alaska, which is super exciting.
We have somebody in Texas, super exciting. But we have some anomalies still, nobody in Utah. So we’re looking.
Kristin Hostetter: I’m sure they’ll come out of the woodwork. So tell us about the overall trends that you’re seeing in Grassroots during this crazy COVID season.
Because one of the big things you guys do is one of the services you offer your members. One of the value propositions is that you collect all this data from these stores and share it. So what are you seeing?
Rich Hill: How much time do we have? It is, I mean for all of us on all sides, I’m sure from your side, our vendor’s side from people providing trips in the back country to our retail stores. It’s been phenomenally challenging. And I’m always surprised that, I shouldn’t be surprised how resilient our retailers are and how difficult it’s been. So we’ve been doing this for months now. And I would say when COVID in the shutdowns first started hitting, it was crisis mode and we seem to be coming out the other side of that right now.
We did a lot of work supporting retailers and just sharing information. It was really what we do. Like we had really a great idea, or somebody finds a solution somewhere in the organization and we share it with the rest of the organization. And then when we don’t have the answer, we go out and try to find it.
And that’s been federal funds, PPP funds, support loans renegotiating leases with landlords. But we’ve done that, we finished that work about six weeks ago, like preparing. Trends where the stores were, running with a lot less staff. We were navigating closures and reopenings and mask coals.
And, that’s all these issues that retailers are having to deal with. And when we looked at our results in June, we’re actually seeing an increase over the last year. It’s 72% of our retailers in June did more sales than they did a year ago. And it’s very different though. It’s a very different landscape and what’s selling and it’s not easy.
And I think if you talk to any one of our members, they would say it’s been an incredibly difficult time.
Kristin Hostetter: So let’s talk about that a little bit. What’s selling and what’s not selling, who’s hurting and who’s not hurting.
Rich Hill: Yeah. I think most of us, intrinsically know those have been reading the news, which is, our consumers are really seeming to them wanting to get outside, do anything. And with us, we have a joke. If it floats, it’s sold. So stand up paddle boards, sea kayaks, anything that floats on the water, you cannot even buy it right now. We’ve sold everything we can get our hands on over the last two months, three months and it’s and it continues.
We have members in the bike business and we all know that bikes almost doubled in sales and hard goods in general, boots, hacks, running shoes, socks. All of those categories are definitely trending above last year. And until we run out of inventory and we’re going to start seeing that slow down as boats are gone. So I expect to see boat sales in August really drop off.
Kristin Hostetter: What’s not selling? How’s apparel doing? Any categories that are just really struggling right now?
Rich Hill: Yeah. Soft goods in general is the trend . We think that non-technical apparel, soft goods are going to be the slowest to come back of all of our categories.
And we’re working with vendors on that also. And technical apparel is even slow. So we’re really curious about what winter is going to bring, there’s all these unknowns, so we’re just preparing the best we can. And trust me, we want apparel to come back as quickly as possible, but we’re just not seeing the demand consumers yet.
Kristin Hostetter: Yeah. Retailers are definitely facing challenging times, but people often forget that the vendors are as well.
Rich Hill: Yeah. And it’s yeah, vendors definitely, rightfully want to know how, what our financial status is by store. They want to know who’s navigating and I’m happy to report at this point we haven’t lost a single store through COVID. And so we’re really excited, but we also need tools when we go into conversations with the vendor community on how they’re doing. And we’ve advised our retailers. And if you look at the aggregate information, as we talked to the vendor community, is that, there’s two accesses.
As we talk about that, one is where are they on the hard goods to soft goods scale as a brand. And the more hard goods they’re selling and the fewer soft goods are selling generally financially they’re a much more solid organization. And people that are all sportswear are struggling.
There’s no doubt. And then the other axis that we look at is their dependency on REI for sales. And you could be a hard goods brand dependent on REI. You have big REI sales which is great, but you’re suffering a little bit because of that dependence because we know they’ve been shut down longer.
They’re taking steps they need to take to protect their business. If you’re a soft goods brand dependent on REI you’re struggling right now. There’s no doubt about it. And if you’re a hard goods brand that’s not selling REI you’re not seeing much of an impact from COVID under results. And so those are kind of the tools we’re helping people to go into those conversations with brands and just knowing where they sit and decisions they’re having to make. Cause we’re in this together and we need to understand our vendors as well as they need to understand us.
Kristin Hostetter: And that dependence on REI is because REI is not ordering as much from these vendors? They’re cutting back on their orders?
Rich Hill: Yeah, it’s not REI. I think any national retail chain, Apple stores are closed nationwide. I think these corporate retail stores, it’s risky. It’s hard to ask your employees to put themselves at risk or run your store. And so they’re slower and reopening they’re softer, and they’re reopening and it makes total sense.
Our stores, the owners are in there taking the risks themselves. We’re back opening, unlocking doors, cleaning bathrooms, handling customers. We have stores flipping back to shopping by appointment. We’re just more, we’re smaller and nimbler to navigate the challenges of COVID.
Kristin Hostetter: Gotcha. Okay. So let’s move on to another topic here, the Connect Show, which is your twice annual gathering is such an important part of Grassroots of the Grassroots value proposition. And I’ve been attending for three or four years now, and I can see why. It’s such a special, unique show and so many great ideas get exchanged and so many connections.
And I think it’s in many ways the glue that really holds Grassroots together. So obviously you had to cancel your June show. Tell us a little bit about how Grassroots has pivoted during this eventless period that we’re in.
Rich Hill: Yeah, cut to the chase. Cause we all, when this started, we all started talking about digital trade show, right?
Like when COVID hit, it was the end. And I think everybody, all of our vendors, Grassroots, Outdoor Retailer, we’re all working to give the community what they need. And we went in not knowing anything. And from the Grassroots perspective, what we’re learning is that what we put out there was just a shared resource for retailers and brands in or out of the organization. It’s such a challenging time. We opened this up to any brand at any retailer, we call it Connect Hub and all we did is simply publish the brands, what every vendor’s strategy was for how to see their line for the season. So if it’s a FTP site, if it’s a link to their digital workbook, price list, or , it’s just a link into their system. Or it’s a phone number, who to call when you want to get information. It’s all in one place. And because it’s such an unknown season, all the buyer has to do is go look up the brand. And this is how the brand wants to be worked with. And we have about 110 brands on the platform right now.
And I talked to Gabe yesterday and I think we’re seeing 50 buyers a day on the tool. And and so we’re all out there and I think all these organizations are sharing their experiences. And what we’re finding from a retailer perspective, the challenge with the current environment is the gift of a trade show.
As you get away from your family and your store for a week, you can focus on the future. And so no matter what we put together, the difficulty is it’s really hard to think about what you’re doing next season and plan. When you’re in your store physically, I can’t tell you on, even on our board calls, when I’ve got nine retailers on a zoom call, we can’t get through a board meeting without multiple interruptions from staff in the store because they have customers and that’s our first priority.
Somebody needs somebody, we have to stop doing what we’re doing and take care of them. And we continue to learn, and then we’re evolving that going into November, just as we constantly evolve our tools.
Kristin Hostetter: Yeah. So it seems like Connect Hub is really just like this big aggregated place with all the resources that buyers need, they can come to one place and get it rather than have to go in all these different places to request a workbook from this vendor. It’s like a one-stop shop situation. And the other thing that I noticed about who’s on Connect Hub is that you’ve got all the big players, in stark contrast really to Outdoor Retailer Online last week, where all the big players, all the players with the big, anchor booths at the show that see so much traffic, they were absent from OR Online. And so I thought that was interesting.
Rich Hill: Yeah. It’s interesting. I was looking at last week and it’s interesting in that I think that Outdoor Retailer’s digital event last week kind of strips it out to retail. It serves for us on a normal season, which is that there were people in there, but we’ve never heard of, and there were new ideas.
There was a lot of education and Camber had their thing. And there’s a bunch of other events on that platform that I know that our retailers appreciate it. But you’re right. It’s the bigger brands, even with our tool, it’s free, it’s open to all retailers. All it’s trying to do is help.
People access information in a simple way. That’s all we were trying to do. We’re still having, we got certain brands that don’t want to be on it and we can’t figure out why. And it’s okay. Like it’s just, there’s still hesitation because everything’s so new. And I think that’s the challenge during these times is we’re all trying to do the right thing and we all have our concerns and we all have the intention that we put into things, but at the end of the day.
I think we just all have to keep open lines of communication to get through this. It’s what’s most important.
Kristin Hostetter: Yeah. So I know that you at Grassroots over there are pretty stoked about your new Switchback program. Can you describe it a little bit for our viewers and tell us where it stands and why it’s important?
Rich Hill: In the middle of COVID, this was, this year was the launch year of Switchback, which is our shared data collection tool that we’ve been implementing over the last 18 months. Switchback is pulling information out of all our participating members stores from their POS systems on a daily basis.
And we aggregate that information for the benefit of our community. And it’s very new for independent specialty retail. Simply put our vision is trying to give an independent, specialty outdoor store similar tools to compete against like big box stores and Amazon and REI and give a single door, the same kind of tools, those larger retailers enjoy.
And so as an example of that, very simply those that enter information into the system, get it fed back to them in a very professional way so they can see the performance of their store, but it also can compare their performance against other members in an aggregated way. So it gives them something to push against.
These were my results. This is how my results by overall, by category, by brand, by product. This is how my sales compare to other retailers in the group.
Kristin Hostetter: I imagine that this is a pretty tight knit group of retailers. They all know each other, they all trust each other. I imagine that results in conversations like actual phone calls, like some of them, I pick up the phone and be like, “Hey, you guys are doing so well in this category or in this SKU, and we can’t seem to sell one. What’s the deal? Does it result in those kinds of conversations?
Rich Hill: Yeah, but the aggregate pushback it’s like they don’t see other retailers specific performance, but it’s aggregated performance so they can put a dimension saying, wow, I’m five points under on margin in boots what’s going on.
And they can pursue why that is. It’s super valuable. And just to be clear, we’re just turning this on. So the tool is built. We have a partner that was in the independent bookstore space that’s been doing this for five years. And so we’re drafting off a really known quantity that’s been out there. And right now I think we have, it keeps changing every day cause we’re really gaining momentum, but I believe we have about 55 doors publishing information right now. And then as it scales, we plan to get two thirds of our members into the tool over the next six months.
So that’s just to give you a sense. So right now it’s in its infancy and it’s growing on a daily basis.
Kristin Hostetter: Good. I’m sure some interesting data will come out of that. I hope you share it with people like me.
Rich Hill: The next step is actually sharing it with vendors. I came from the other side of the table. I worked on the vendor side for years and part of my motivation to push Switchback so hard is that we’re difficult for brands to work with. You say we have more doors than REI.
And it’s true. We’re a super important community for brands. We’re a great access point for consumers. It’s super valuable, but we’re tough to work with. And if you asked for a sell-through report from every grassroot store, so we’re eighties, we are 83 members. So let’s say you have a brand and you sell to all of our locations and you ask for a sell through report, you get 83 different formats that you’d have to digest somehow and make sense of. And the vision with Switchback is for a vendor, you don’t have to have 83 requests for information. You just go to one place on a daily basis and they can support our businesses in a much simpler way.
Kristin Hostetter: Yeah, that makes total sense. Okay, so you’ve got something else that’s pretty cool in the works, I hear. Something called Indie Outdoor?
Rich Hill: Yeah. It is our program where we are going to be championing independent, local retail to consumers. So Grassroots is an industry facing organization Indie Outdoors is our vision, to where we tell our story to our local markets.
We’re going to champion localism where we’re taking a guiding light from independent brewers association and from independent bookstores . It’s also a much larger organization than Grassroots. It’s our vision. So we’re kicking that off and we’re forming that organization this year and plan to launch it next year officially. But you’re going to start hearing about it cause we’re starting to talk to retailers and starting to talk to vendors about this as an organization. And our idea is, Grassroots is a group of specialty retailers who are willing to collaborate and share information to improve their store. The way to look at it is “fast alone, far together” is the term. We can go far together, but not all retailers are willing to collaborate.
They’re great stores. They’re fantastic. But it’s just not in their DNA to work in an organization like Grassroots. And so we want to pull them in and give them tools and give consumers tools to find ways to find those stores in those markets.
Kristin Hostetter: Yeah, that’s great. And the shop local movement is so popular right now in virtually every industry.
So that makes a lot of sense. And so you’re going to be inviting all retailers to participate in Indie Outdoors, but still retain the core group of Grassroots members and grow it at the same level.
Rich Hill: Yeah. We see a vision– for those that have been to our Connect Show –our vision is to have that event be all members.
It’s always been a combination of member/non-member over the last three and a half years. And as we grow, we see that event being the kind of similar moving forward. Just every retailer there as a member of Grassroots outdoor, and Indie could be an organization that’s going to include all the Grassroots members plus another 500 stores around the nation.
So yeah. We call it concentric circles is how we look at it.
Kristin Hostetter: Very cool. Okay. I want to talk about pro deals because you and I have had many conversations about pro deals and how your retail members really have a problem with the way pro deals have evolved in our industry and in the way that they’re abused as another direct to consumer channel for these vendors.
And these conversations prompted us to do a big investigative feature in our recent issue of The Voice. And I’m sure you’ve had a chance to read that. Do you want to talk about that a little bit, shed some light and some perspective from Grassroots on the pro deal problem and where it’s headed and what we can do about it?
Rich Hill: I want to thank you for the work you guys put into it because it’s a really challenging conversation. I oversaw pro at three major brands in the industry. Like it’s something I know a lot about. And it’s a program that I think all of us believe in.
Getting the right people in there into your brand and supporting, and turning other people onto that product and the values of those products I think is super important. But what we’ve seen, especially over the last five years, it’s just, it’s proliferation. I don’t think one of our retailers quoted it as a drug dealing operation, but it is once you get the taste of selling stuff at 40 off and the communities it grows, it’s just, everything’s 40 to 50 off, you’re going to get results in sales from it. And ultimately it tears down our ability to sell those brands. Brands can do whatever they want. And what we’re trying to say is if you want us to support your brand, this is the kind of thing that makes that impossible for us to do it.
Kristin Hostetter: One of the big things about pro deals that we discovered in our investigation is that it used to be that it was open to people that worked in retail shops and people that worked in the industry. And it was very defined. And now with a lot of these third party pro deals and even the direct brand pro deal programs ,you don’t have to have a job in the outdoor industry to get a pro deal. And we know this because we actually created fake personas and applied to all these programs for this investigation that we did.
And it was way too easy to get your foot in the door and start getting discounts there. And so then what, you’re basically training the general public, general outdoor enthusiasts, to not shop at retail and full retail prices. You’re training them to wait for these pro deal offers, right?
Rich Hill: Yeah. And if it was just what you talked about, it wouldn’t be nearly as bad as it is. So what I think pushed us over the edge is then what we were seeing is a trend to twice a year, pros were getting, share your pro. Like for a friends and family deal. They’d get three codes for 40% off for that brand. So if you took that pro community, especially in a small mountain town and you gave every pro three 40% off discount codes, and then some of those programs had $2,500 minimum.
So you’re talking like $7,500 for the stuff at 40% off hitting a small mountain town. Yeah, we just can’t support brands that do things like that. There’s just no way. And we’re seeing that turnaround. I want to thank you for just illuminating the discussion because it’s a complex discussion that we know is damaging to our relationship.
And I have personal experience of cleaning up programs that have helped the business. And so it’s been challenging. And we’ve been reaching out to these program administrators and trying to engage them in conversations. And I think my favorite quote was from one of my favorite retailers was that one of these third-party pro sites is a bigger risk to their business than amazon.com.
That’s how they see it. That’s how important this is. It’s a big deal. And the brands we work with that we’re successful with know that. They see it, they agree, we’ve seen a bunch of change and we’re just continuing. So we’re really excited about the direction that pro’s going right now.
And you’ve been super helpful to get the message out. So thank you.
Kristin Hostetter: Yeah, you’re welcome. Okay. Let’s talk about another really important topic in our industry and really in the country right now, which is diversity, equity, inclusion. Of the 83 Grassroots retailers, are any of them owned or operated by people of color?
Rich Hill: Not to my knowledge, not a single one. I don’t even think we have a manager of color within the group. But part of our issue is I described it when I reached out to some board members at Camber for a conversation. And I told them, I don’t even know how to ask the question.
I’m woefully unqualified to start this conversation. So when we went into our strategic planning for the season, I had one of our members, Mark from OGE up in Vermont at Outdoor Gear Exchange sent me a note and he said, “Hey, rich, Grassroots has to tackle this thing and I need you to do it.”
And it’s been on my list for years and I have dragged my feet and gotten nervous to enter into the conversation. And we’re not doing that anymore. I took Mark’s advice. Reached out to some friends, people I trust and we are going down this road. It’s still super early for us to go into specifics, but I think the first thing we know we have to do is gather the data of the reality of where we are right now. What is our starting point in this conversation? And I’m working with Camber to start that conversation. And those first conversations have been fantastic. Just seeing the framework, seeing the tools they have in place for organizations like us to start those kinds of conversations. I’m really excited to go down that road.
Kristin Hostetter: Great. That’s good to hear. I know a lot of leaders are in the same situation that you are. And I think, the conventional wisdom says don’t be daunted by the end game. Start taking steps, little steps, to get where you want to go. So good for you. I’m glad you guys are tackling that.
All right, last question. I know you were really excited back in, I think it was December, to announce that the fall Grassroots connect show was relocating to Kansas City.
Rich Hill: Yeah.
Kristin Hostetter: Will that show go on as planned at this point in November?
Rich Hill: No, that’s not happening. We are super excited about Kansas City. We think it’s going to be a great home for Connect in the middle of the country, totally walkable, our show. It’s like you stay close, like restaurants, the facility, all your friends are all in one area and there’s no cars involved. It’s as convenient as possible.
And yeah, we really want to get back together. You can sense it. I was just on an owner call. We had three screens of faces on a zoom call, and you could just sense how much people miss interacting with other retailers. Like you can sense it even on a zoom call.
But the reality is, I think we all know that we don’t have a solution. We don’t have a solution to protect everybody while they travel. There’s enough of our members who are not willing to travel at all in November. We know that for sure. Three of my own board members have just said, I’m not traveling no matter what, I know brands don’t have budget to travel in November.
We know there’s risk and traveling. And so we need to cancel it. Now the reason I’m not being super specific is trade events like these are difficult. You just can’t turn them on and off. There’s so many people involved. And so we’ve been in contact with Kansas City and are working with them closely to try to find a way out of our commitments, where it doesn’t hurt the organization.
And we maybe extend our relationship in Kansas City is our hope. And we’re all in the same boat. The people that work in the trade show space. We think retail’s tough. Our person that advises us on these kinds of things, doesn’t have a single event in this calendar year that’s survived. It just is, everyone wants to do what’s right by our partners in Kansas City before we make the official announcement. But anyone that asks, I say, look, we all know it’s not happening. We just have to cross the T’s and dot the I’s to get it done.
Kristin Hostetter: And the reality is we don’t know when we will be back to gathering in this capacity. It could be another year. Who knows? I hope not. God. I hope
Rich Hill: I know June that the next event would be June in Knoxville and trust me we want nothing more than to gather. And I just talked to Devaki Murch who really puts the show together and she’s on hold until we have another event.
And, it’s super important to us. What we found is, I mentioned earlier that it gets us away from our stores. We’re in a space when we’re at our event to strategically plan, but it’s also when we can elevate our retailers. We can educate, we can kick off new technology programs and elevate their ability, do trainings. And, if you talk to retailers, it’s also, the efficiency of Connect is what people are missing. Four days, they get a month’s worth of work done. And to try to recreate that work when you’re on your own, when you’re in your own store, retailers are telling me it’s taken them a month to do the work they get done in less than a week at Connect. So the efficiency is what we miss also.
Kristin Hostetter: And hugs.
Rich Hill: The hugs and the happy hour. I’ll tell you canceling these things like season after season, it’s getting tiresome. And yeah, it’s painful for all of us. So let’s keep our fingers crossed to get back into Knoxville in June.
Kristin Hostetter: Absolutely. Rich, it was so great to catch up with you. Thanks so much for all your insights. I appreciate your time today.
Rich Hill: Thanks for the opportunity. And I do appreciate the ability just to get the word out and what Grassroots is doing and thanks again.
Kristin Hostetter: And thank you everybody for listening to this episode of the Straight Talk podcast by Outside Business Journal. The outdoor industry is full of fascinating people doing bold things, whether it’s in sustainability, diversity, equity, and inclusion, specialty retail, activism, marketing, or brand building.
And here at Straight Talk, we dive straight in. This episode was produced by me, Kristin Hostetter. Our executive producer is Jeff Moore. Our executive audio engineer is John Barclay. Our associate producer is Aashish Shesthra. Our production assistant is Louisa Albanes. Please subscribe today to the Straight Talk podcast, write us a review, and of course stay up on the latest outdoor industry news at OutsideBusinessJournal.com