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When the venerable Denali closed its doors in July 2019, leadership’s reason was that they “could not find a responsible path forward.” It got me wondering, what does it mean to be a responsible retailer today?
To be successful, outdoor specialty shops have to offer much more than dot-com and direct-to-consumer (DTC) businesses, yet at the end of the day, we’re selling the same products. As the small teams that keep speciality shops alive are stretched thin, the businesses themselves are pulled by responsibilities to employees, vendors, customers, and community. Retailers face more challenges than ever before as the cost of doing business continues to increase—higher wages and cost of benefits, smaller discounts from brands due to unattainable growth-oriented incentives, and wider distribution on the web leading to the proliferation of discounted merchandise.
We polled a group of successful outdoor retailers to determine three of the biggest challenges they face today and then we dug into the nitty gritty details about how to face those challenges head on in the most responsible fashion.
Being responsible to your staff
To hire quality staff, you must be a “good employer,” Davis said. Employers want to offer competitive employment benefits, such as health insurance and paid time off, especially to long-time employees. And as bigger companies offer more and more bells and whistles, this only ups the game.
However, as margins decrease, payroll can’t keep going up. Davis said that Summit Hut has been forced to cut back on employee appreciation party budgets and other fun staff perks.
Jen Barrett from Wild Iris Mountain Sports in Wyoming said staffing has been particularly difficult in the last 18 to 20 months. Hiring demands a lot of time and energy, making it especially difficult to keep up the day-to-day details of the business, she said.
Proven tips from the trenches: When budgets get tight, invest more time into your staff by teaching them different elements of running a small business that go beyond the day-to-day floor tasks, Davis said. Some examples include talking about buying strategy, budgets, costs of doing business, and sales reports. Your employees will be hard-pressed to find other employers willing to take the time to teach them about how a business works at a larger company where it is more about just getting the job done. Sharing your knowledge of business will show your team that you are invested in their growth even when cash flow may make raises or bonuses more challenging.
Being responsible to your vendors
Paying vendors on time is crucial to maintaining symbiotic vendor/retailer relationships. They are the bedrock of specialty retail as shops rely on access to quality products and vendors need specialty shops to introduce new products to the market. But due to the DTC strategies of brands like Smartwool, Patagonia, prAna, and many others opening up their own branded brick-and-mortar locations, many retailers now view vendors as competitors.
“In the past five to six years, there has been a lot more tension between retailers and vendors because more vendors are now selling direct and the retailer is feeling squeezed out,” Davis said.
Travis Zarins from Great Outdoor Provision Company (GOPC) in North Carolina, said that “irresponsible, growth-oriented incentives” brands are pushing encourage retailers to overbuy. David Polivy from Tahoe Mountain Sports in California has also experienced the push, and offered an example from spring 2019.
“I had a meeting with Salomon and they told me they’re expecting their retailers to grow 15 percent year over year,” he said. “These types of growth initiatives are not healthy or even realistic.” While Polivy busted his ass and reached the growth incentive that year, he said his Salomon sales reps recognized that the goal was not sustainable, so they dialed them back the following few years. Polivy said, “These high sales growth projections seem to create uncertainty from season to season and make it hard to keep strong partnerships.”
“It’s our responsibility to keep our vendors honest and keep them with as much skin in the game as we have,” Polivy continued. This requires consistent, open and honest dialogue with reps and brands so that vendors understand the evolving challenges and needs of specialty retailers.
Proven tips from the trenches: Try buying less. With brands accessible on more platforms, the supply goes up and the demand for product is not what it once was. Polivy says it’s key that retailers communicate openly and honestly with vendors and sales reps. A few percentages is a sustainable number, but 15 percent is not, Zarins says. The key point retailers need to convey to brands and reps is that to stay nimble, they need less on-hand inventory so that they can follow in-season trends in today’s fast-paced market.
Being responsible to your community
Specialty shops are one of the first places people go to get the quality gear, education, shopping experiences, and community they need to explore and enjoy the outdoors. With the sheer number of choices in today’s market, it makes the buying process even more difficult for retailers as they hone a selection tailored to their respective communities.
Retailers want to do the right thing not just for their customers but also for their communities. It’s not enough to just sell gear that facilitates adventure; actively supporting protection of public land and trails and the environment is key. Barrett shared the sentiment of many retailers when she said, “We feel a big sense of responsibility in our community and work to achieve that.” Wild Iris hosts several fundraising events throughout the year to support local nonprofits. GOPC holds an annual land trust day, where a portion of sales goes to local land conservancies.
“We have a responsibility to protect the places we love,” Zarins said. Having local trails to hike, clean rivers to paddle, and outdoor recreation areas open to the public are essential if we want customers in our communities to have places to get out, explore and get their gear dirty. Partnerships with organizations doing the work on the ground keeps retailers engaged in the important local conversation and outdoor education initiatives. In order for speciality retailers to continue to protect the wild places though, consumers have to choose to shop local over big box and online stores.
Proven tips from the trenches: Specialty retailers hold a unique place in the market in their ability to support local environmental initiatives close to their consumers’ hearts. Through building meaningful relationships within the community, retailers not only educate customers about relevant issues, but also gain loyalty. As Zarins and Barrett both echoed in their interviews, it is important to be a place where consumers can shop responsibility, knowing that their dollars are helping make a positive impact locally through your outreach efforts and globally through the brands you choose to carry.
Do you have a topic you want Betsy to explore in a Retail Voice column? Submit your idea by emailing firstname.lastname@example.org.