Events - June Ushers in Torrent of National Outdoor Events

If outdoor retail sales fail to pick up this month or next, it won’t be from lack of publicity about the great experiences awaiting American families in the great outdoors. From Secretary of Interior Ken Salazar to the marketing gurus at The North Face, outdoor advocates are taking the offensive to pitch camping and hiking as a great way to recreate this summer.

A host of events is generating publicity about outdoor excursions and opportunities this summer, which should help drive traffic into stores. Retailers can read some tips for preparing in this WebNews article published in April.

A partial list in chronological order includes:

Great Outdoors Month (June): President Barack Obama and more than half of America’s governors have proclaimed June Great Outdoors Month. The proclamations were urged by a coalition of dozens of recreation and conservation organizations, many of which coordinate special events held during June, including National Trails Day, National Fishing and Boating Week, National Get Outdoors Day and the Great American Backyard Campout.

TNF Launches National Camping Month (June): The North Face designated June National Camping Month and said its stores would offer free clinics to inspire customers to get outdoors. TNF partnered with Travelocity to present Explore Moab, a sweepstakes which gives people a chance to win a grand prize trip for two to Moab, including airfare, lodging, meals and guided hikes and tours and a $2,000 TNF gif card.

National Trails Day (June 6): The American Hiking Society expects participation to match last year, when partners organized 1,112 events that drew more than 100,000 participants, including 30,000 volunteers who donated 160,000 hours working on 421 trail projects. Press interest in the events seems to be on the rise, said Margie Cohen, director of marketing and development for the society. She said it’s unclear whether that is due to greater interest in the outdoors or new partnerships with the YMCA, the Boy Scouts of America and the Girls Scouts of America. The bulk of the events occurred June 6, but more are planned for the balance of the month.

National Get Outdoors Day (June 13): Saturday is National Get Outdoors Day, organized by the American Recreation Coalition, and targets outdoor neophytes, including urban families who rarely engage in outdoor activities. This year the event will hold more events in urban parks and work more closely with church youth groups and urban youth service organizations to attract kids. National sponsors include the U.S. Forest Service, Clif Bar and The Coleman Company. A full list of partners, including Bass Pro Shops, Cabela’s and REI, and a list of all 59 event locations for this year can be found at nationalgetoutdoorsday.org.

Fee-free Weekends in the National Parks (June – August): Last week Secretary of the Interior Ken Salazar announced that the National Park Service (NPS) will offer three fee-free weekends this summer to encourage Americans seeking affordable vacations to visit national parks. The 147 of 391 NPS Sites nationwide that charge fees for entry will waive them on June 20 through 21 (Father’s Day weekend), July 18 through 19 and August 15 through 16. For a list of those parks, click here. Many parks will be giving away free reusable shopping bags and offering free digital portraits during these weekends, while concessionaires will be offering discounts and promotions to generate traffic. At Glacier National Park, for instance, Swan Mountain Outfitters will offer $5 to $10 off certain horseback riding packages.

Great American Backyard Campout (June 27): The National Wildlife Foundation has designated June 27 for this annual event, which offers people organizing a camp out of 16 or more people to use organizing tools on its web site. The National Wildlife Federation encourages parents and kids alike to trade their website for a campsite and screen time for green time, according to a media advisory

Retail - NPD’s Economy Tracker Shows More Consumers Plan to Increase Purchasing

The latest information from leading market research company The NPD Group, Inc. shows a continued upward trend in consumer purchase intentions.

NPD’s Retail Response Indicator rose 4.5 points, from 39.5 points in April to 43.9 points in May. This is a continuation of the upward trend first seen from March to April. The Retail Response indicator measures consumer spending intentions on a 0 to 100 scale, with 0 representing “Reduce or Spend Less” and 100 representing “Spend More.”

“The continued increase suggests that stabilization is holding,” said Marshal Cohen, chief industry analyst, The NPD Group, Inc. “We are seeing consumers move toward replacement and replenishment purchasing and these are the kinds of purchases that would indicate we have taken the first step toward recovery.” Cohen added, “It is also important to note that the longer stabilization holds the more solid the foundation on which we can build a strong recovery.”

Survey respondents continued to show less concern about the security of their jobs. Once again, the percentage of those feeling “very concerned” about the security of their job or income dropped.

“While consumers are still registering concern about their jobs, overall their concerns are diminishing. And as concerns about job security diminish, retail sales continue to stabilize,” noted Cohen.

Retail - April Outdoor Sales Indicate Declines Easing,

Retail sales for all core outdoor stores combined (chain, internet, specialty)* grew 2% compared to last April, moving from $339M to $347M, according to the most recent edition of The Outdoor Industry Association (OIA) Outdoor Topline Report, produced for OIA by the Leisure Trends Group. Sales for the four months of the year totaled $1.4B, down 5% from the same period in 2008.

Outdoor Chain – Shoppers ReturnAccording to the OIA Outdoor Topline Report, chain stores saw sales surge 20% in units and 18% in dollars. Every major product category (equipment, equipment accessories, apparel and footwear) and most sub-categories gained. Products that appeal to families and car campers fared especially well. Recreation tent sales shot ahead of last April by 78% in units and 64% in dollars. Sun shelters were up 88% in units and three-season recreation tents, retailing for $124, jumped 71%. Synthetic fill rectangular bags, retailing for $32, increased 82% in units whereas the more technical synthetic mummy bags, at $99 retail, grew 31%.

Outdoor Specialty – Declines Slowing But Not Yet ReversingIn specialty stores, April declines were not as severe as in past months, as total sales fell 1% in units and 4% in dollars compared to April 2008. So far this year, all specialty unit sales declined 6% and dollars fell 10%. Each major product category (equipment, equipment accessories, apparel and footwear) saw single-digit declines compared to last April. There were bright spots this month, too, as synthetic sleeping bags, medium-sized packs, climbing gear, multisport shoes, hiking boots and various equipment accessory categories posted gains.

Outdoor Internet – Retail Prices Rise, Units Fall as Online Retailers Reign in Clearance ProductInternet sales totaled $54M this month, falling 20% in units, rising 4% in average retail-selling price and dropping 17% in dollars. All year, Internet sales have been sporadic, up 35% in January on huge carryover sales, down 9% in February, back up 14% in March and now down 17% in April. Higher retail-selling prices across many categories coupled with dramatically smaller carryover sales (defined as old and/or discontinued merchandise) point to either a lack of available merchandise and/or online retailers reigning in the amount of rock-bottom clearance priced product they are offering. If this is the case, total sales may have fallen but profit per turn might go up.

Hands-on Hydration Reaching Plateau?Hands-on hydration, consisting mostly of water bottles, is now an $89M category across all store channels in the current rolling year. However, the category seems to be reaching the height of its growth, after a meteoric rise. While still up 15% and 28% in specialty-store units and dollars so far this year, the hands-on hydration category dropped 10% in units and 2% in dollars in specialty stores compared to April 2008. The category plunged 54% in online units and 57% in dollars from last April, while still seeing growth in chains. Looking at all three store channels together, total units were flat in April and dollars grew 5% on a 5% increase in retail price. Still, with $6.9M in total April sales and $22M YTD, the category is a long way away from the 2006 totals of just $2M in April and $6M in the January – April YTD period.

Paddlesports – Canoes Bright Spot for AprilCore paddlesport stores (specialty, chain, internet) brought in $36M in April and $86M so far in 2009, dropping 1% and 3%, respectively, against the same period last year. While all boats, with $21M this month, dropped 2% in both units and dollars, both recreation kayaks and canoes gained steam compared to last April. Recreation kayaks with an average retail price of $769, up 7% from last April, gained 3% in overall dollars for an April total of $11.2M. Canoes gained 5% in units, 4% in retail price and 9% in total dollars this month.

SNEWS Special Report: A broken supply chain? The retail perspective

The quest to help facilitate the discussion around finding a solution to a badly flawed outdoor industry supply chain began with an email plea to SNEWS® in March from a number of retailers. The email called out a list of challenges to the way we buy and sell, from a retailer's perspective:

• too many trade shows, both regional and national exist, and yet we keep adding more;
  
• early preseason and pre-show buying deadlines keep moving forward at an alarming rate;
  
• rep line previews are taking longer, as is the amount of time required to write an order, sometimes as much as four days, for a single brand;
  
• minimum order amounts for best terms continue to escalate in price, making them unreasonable for most small specialty retailers;
  
• reps for larger brands demand time in stores from buyers and store owners often during the busiest selling seasons, right when owners and buyers need to be focused on managing their business, brands and staff;
  
• and the pressure from too many vendors -- each selling too much me-too product -- to buy multi-categories from each vendor, often leading to retailers taking on inventory they don't want or need to get best terms.

As SNEWS started to peel back the layers of the onion to work on better understanding the issues from all sides, we quickly realized there was going to be no simple answer to what has become a very complicated issue. We spent several months investigating, including visiting factories overseas, interviewing numerous manufacturers (CEOs, production managers and designers), talking with sales reps, trade show organizers and other retailers. Then we chatted with industry consultants to seek opinions, garner background information and decide how best to proceed. One common thread began to appear among the complexly woven tapestry: Everyone shares some responsibility for how we arrived at the current supply chain problem and everyone must act collectively to find a solution.

Somehow, in the headlong race over the last 15 years to chase the almighty sewing dollar, we have managed to create a production and sales cycle that is so complex even executives coming into our industry from far more seemingly complicated markets shake their heads in wonder. Few retailers and even fewer manufacturers from other industries are making buying and selling decisions a year in advance -- decisions that can make or break a season or even a year.

Order lead times have lengthened, necessitated in part because manufacturers insist they need 10 months or more lead time for greige goods (i.e., unbleached and undyed textiles). That means reps are showing up in key stores in November, asking buyers and store owners to make buying decisions for products that won't deliver until the following August, intended to sell during the months of September through December.

The problem with this, retailers told us, is they often have no real idea what will sell through this year in order to make an educated guess as to what colors and styles might sell well next year. Worse, few feel confident enough about their personal crystal balls to place orders when there is no way to gauge the economy, trends or consumer buying moods that far in advance. In the outdoor specialty market, with few exceptions, the strongest selling season for most retailers is November through January (on average, 25 percent to 30 percent of all sales are made during this time). The second most important selling season appears to be May through mid-July. With the current ordering cycle, reps are coming into stores during the busiest selling seasons, and buyers and storeowners, and often key floor sales staff, are having to spend significant off-the-floor time in meetings. Retailers also point out that once the rep has left, their scramble is not done, as most manufacturers now are demanding paper by December for the fall deliveries and paper by late June and early July for the following spring deliveries.

If it were only as simple as viewing product and placing an order, that might be one thing, but retailers also tell us that during those same peak sales times, they have to be in contact with their sales reps by phone or email, national sales managers by phone, and in some cases, even sales VPs or company owners to ensure turns and profits are maximized and the best terms are worked out. Since every retailer is doing much the same thing, and there are only so many reps and sales managers to go around, retailers tell us that this leads to a circus of voicemail messages, phone tag dances, and games of hide-and-seek that are enormous time wasters. Multiply that scenario by 100 brands all demanding essentially the same performance and one begins to wonder how any business is getting done at all, let alone good buying decisions are being made.

Most retailers we spoke with are responding to the shifting economic climate and consumer buying habits by modifying traditional preseason and fill-in strategies to align more closely with inventory need. The majority is now allotting only 55 percent to 60 percent of their dollars for preseasons with the rest kept in pocket for fill-ins and chasing bargains. But manufacturers still seem to want retailers to essentially super-size their orders to gain the most favorable terms, we were told. And that just doesn't seem healthy either.

Retailers further explained to us that manufacturers seem to be on the same path, despite the economy, of trying to push preseasons earlier and earlier. Retailers assert that manufacturers apparently want to tie up more of the retailers' dollars earlier, so they can garner a competitive advantage and, perhaps, ensure earlier production time on the factory floors in Asia.

Not one retailer we spoke with told us manufacturers were lowering thresholds to garner the best terms -- even in this challenged economy. In fact, most manufacturers appear, according to retailers, to be insisting retailers maintain flat to increased business to earn best terms -- often requiring they take on more SKUs and a broader product mix than a retailer might wish to carry from that particular vendor. Retailers told SNEWS that while they suspect manufacturers are doing this to prevent cherry-picking of lines, this kind of business approach is not only short-sighted, it is the kind of strategy that created the overstock scenario many retailers found themselves in when the market collapsed in late 2008. And, it is this approach to force-feeding a retailer that is the primary reason why so many preseason orders were cancelled this spring, leaving manufacturers stuck with spring/summer inventory that had landed, but wasn't selling.

Additional preseason trade shows, regional shows, rep shows and moving the dates on what is currently considered our national show, Outdoor Retailer, are of no help and do nothing, really, to address the overall issue of a broken selling cycle, retailers said. The earlier the shows move, they said, the earlier still the manufacturers continue to push their reps to get in to see key retailers, and round and round the merry-go-round goes.

Retailers acknowledged, somewhat wistfully, that the days of heading to an August or January national trade show for the inaugural "show and tell" of new product, followed by the buying decisions either at the show or a month later, are long gone. There are too many brands with expanding product lines and production spread all over the globe for that to ever work again. In fact, some argued, we have too many brands to begin with now…but that's a topic for another day.

So, from a retailer's perspective, what are the solutions?
1. Stop all the show madness -- pre-shows, manufacturer preview shows, regional show additions and trade show date dancing. Less is more here.

2. Reps are welcome (begged for and wanted a number of retailers told us) in the stores November through December and June through July as long as they are there to drive sales by supporting the sales staff and working the floor, not give a line presentation. If manufacturers are creating a scenario where reps feel they need to be in the stores giving line presentations -- sometimes lasting multiple days -- then the manufacturers need to shift the order and production timelines to eliminate this.

3. Manufacturers need to realize that retailers are going to order less in preseasons, and as a result, require more with fill-ins. For retailers, it is about turns, not about how much has been preseasoned. Core products should never be out of stock.

It is VERY important, however, that everyone reading this, realizes, as SNEWS does, that the above is but one view of a very complex situation -- it is how retailers are looking at the supply chain problems. Next up, SNEWS will take a look at the distribution challenges through the eyes of the rep.

Our goal with this series of editorials is to engage the industry in healthy discussion. Perhaps open a few eyes to seeing things through a new lens, and, hopefully, help us all arrive at a series of ideas and action items that will, in the long term, lead to a healthier and more profitable industry for us all. --Michael Hodgson

Time to get a workout in!