Online outpaces specialty retail growth — is what's good for the goose good for the gander?
Online sales of outdoor apparel and gear are booming, according to Leisure Trends Group data — including at flash clearance sites like The Clymb. But is it good news for everyone?
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Most of your customers are doing it. It’s their lunch break, they remember they wanted to buy that new hydration pack, or some other essential piece of gear, but there’s not enough time to dash to their local specialty retail shop.
So they hop online, click, click, click, and the product is on its way to their doorstep in a few days. Many specialty retailers worry the trend is as much about bargain-hunting as convenience.
Online sales have been blowing up pretty much since Al Gore invented the Internet. Leisure Trends Group started tracking online sales data in 2005, when it noticed them starting to surge.
“They’ve grown very quickly and they are definitely growing faster than either chain or specialty stores,” said Scott Jaeger, a senior retail analyst at Leisure Trends Group. Jaeger said between 2005 and 2011 online sales have more than doubled, up 111 percent in dollar sales, and it was the only channel to grow during the recession when both chain and specialty were down.
Online business, at $97.2 million, accounted for more than 25 precent of outdoor sales within the past year, according to Leisure Trends.
This trend had led to success for online retailers like Backcountry.com, and so-called “click-and-mortar” stores like Austin Canoe and Kayak (this year’s SNEWS-Backpacker Retailer of the Year Winner for Best Online Retailer). Furthermore, the popularity of social media and flash sales has given rise to websites like The Clymb and Steep and Cheap that sell closeout or clearance items.
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Backcountry.com Chief Marketing Officier Dustin Robertson told SNEWS that specialty retailers shouldn’t worry too much about the recent growth in online sales, saying Internet retailers and brick-and-mortar stores have different strengths.
Many specialty retailers beg to differ.
They’ve told SNEWS that potential customers come into their stores to see and feel products — and benefit from their staff’s knowledge and expertise — only to find a lower price online from sellers with fewer overhead costs. It’s a trend called “showrooming.”
“We know for a fact that’s happening,” said Mike Lavine, manager at Ramsey Outdoor Store in Succasunna, N.J. “We’re kind of defenseless there. There’s nothing we can do and it’s hard to find out what a customer’s intentions are. We find it happens with our more specialized products like fishing rods. People come in here and talk to one of our sales people for half an hour to 45 minutes and in certain cases we find they bought it online when they come in to have us put a line on it.”
With today’s mobile technology, and apps like RedLaser and The Find, consumers can even scan the product tag in a specialty shop, find it for a lower price online, and complete the purchase while still standing in the store.
Backcountry.com’s Robertson argued the two different channels feed off one another’s success. Just because people shop online doesn’t mean the sale is always completed there. He said a majority of the people who come to his site are looking to research products and much of the time those customers will go into a retail location to purchase products.
“On a good day we convert 2 percent of the [site ’s visitors] into customers,” Robertson said. “Ninety-eight percent of them are browsing and researching products. They like to go to the store and try it on and feel it.”
Robertson said online-only retailers want to keep specialty retail locations open. “We are big believers in brick-and-mortar,” Robertson said. “Specialty retail needs to exist. They are the backbone of our industry. Those are the folks that are passionate about the gear and we’re pretty concerned if that gets jeopardized.”
“We’re sending people into their stores all day long,” Robertson said. “As long as the price is held constant, there’s no reason why they couldn’t make the sale.”
Click-and-mortar retailers, like Austin Canoe and Kayak and Moosejaw, attempt to target the best of both worlds. Moosejaw recently openened its eighth store and has plans for a ninth in Boulder, Colo., as SNEWS previously reported. And Austin Canoe and Kayak’s owners, Peter and Steve Messana, gave some insight on how they’re able to successfully run both online and brick-and-mortar locations.
“We price the market both online and in our stores, they are not always the same,” they wrote in an email to SNEWS. “It depends on the market, but we try to keep them the same whenever possible. We do not adjust based on the overhead of the store and it wouldn’t be as easy as the store overhead isn’t all that dissimilar to the shipping and handling costs online poses.”
Eoin Comerford, Moosejaw’s senior vice president of marketing and technology, explained that the overhead for the company’s stores isn’t necessarily always higher than for their online store.
“The higher overhead of rent and staffing in retail is offset by much lower marketing expenses than online,” Comerford told SNEWS in an email. “In other words, paying rent for the right retail location drives your traffic while online traffic must be continually driven by ad words, affiliates, etc.”
Comerford added that specialty retailers that focus on high customer serivce, knowledgable staff and a well-merchandised store should be all right, as long as they embrace the web to benefit themselves.
With its physcial stores, Moosejaw faces the risk of showrooming just like any other specialty retailer. Its solution, officials said, is to arm floor staff with the same mobile devices consumers are using for comparitive shopping. The technology can be used to search within the company’s online inventory and other stores for different colors or sizes and keep the sale in house.
Success for other channels
While it’s not the same thing, flash sale sites like The Clymb and PlanetGear (another site that holds flash sales for women’s gear and apparel) have benefitted from people’s inclination to shop online. SNEWS interviewed representatives from both companies last summer, click here to read that story.
The Portland-Ore.-based, members-only site The Clymb has surpassed its goal of 1 million members since it was founded in 2009.
Clymb co-founder Cec Annett said the site has grown quickly by word of mouth and because people like getting deals on items from well-respected brands.
“We’ve been able to get very successful in gaining traction with members but also with the brands,” Annett said. “The brands in the industry realize our authenticity in the space.”
But Annett said people will always gravitate toward specialty retailers because there are certain things a shopper cannot get online. Robertson expressed a similar sentiment.
“The thing the Internet will never be able to replicate,” Robertson said, “is the touch and feel experience and the local knowledge,” of specialty retailers.