Retail - Trading Down Phenomena has Outdoor Retailers Shopping Lower Price Points

Some outdoor specialty retailers are beginning to follow their customers down market. “I think people are scaling back on the number of $400 shells they are bringing in and buying more $100 shells,” said Dave Matz, president of Grassroots Outdoor Alliance. “There is a movement to bring in a lower price point.”

While fashion and luxury brands are much more vulnerable to the trend, average retail prices have declined in specialty outdoor channels thanks to a surge in sales of carry over product and a rise in sales of accessories, according to retail sales data for January released last week by Outdoor Industry Association (OIA) and Snowsports Industries America (SIA). SIA reported that while consumers snapped up accessories like hats, gloves, goggles, wax, parkas, fleece tops, sweaters and winter boots, they backed away from buying skis, boots, boards, and bindings.

In outdoor channels, the share of product sold in the fourth quarter that was priced under $25 grew to 17.5% in 2008 from 16.7% in 2007 and 16.0% in 2006, according to data compiled by Leisure Trends Group for the OIA Outdoor Topline Report. The share of product priced over $100, meanwhile, fell to 38.0% from 40.0% and 39.1% respectively. The trend became more pronounced in January, when sales of sub-$25 product grew to 22.7% of total outdoor sales from 18.7% in the same month a year earlier. Sales of $100-plus product fell to 33.0% of total sales from 38.0% a year earlier. The share of footwear sales priced under $25 nearly doubled to the 10% range.

While analysts warn against reading too much into January sales figures, consumer surveys are detecting the shift down market, particularly in apparel. In one survey published last month, 90.7% of Americans designated specialty shopping for apparel as expendable.

Even specialty retailers catering to a more affluent clientele are introducing lower price points. Their thinking is a shift in consumer buying habits toward value and will continue long after the recession ends. In Charlotte, NC, Jesse Brown’s Outdoors is bringing Columbia Sportswear apparel back into their shop for the first time in years. Owner Bill Bartee stopped buying Columbia years ago after deciding his future lay with brands not carried by big-box retailers. With consumer anxiety over the economy rising, Bartee will add product from Columbia’s PFG and Titanium lines to complement his assortment of Arc’teryx, Ex Officio, Patagonia, Mountain Hardwear and The North Face.

“We will still sell $500 Gore-Tex shells,” said Bartee, “But we will sell less of them. Columbia will bring a price-point to Jesse Brown’s that to a large extent is not available right now. We anticipate a backlash against luxury.”

Some retailers see the recession accelerating a long-term trend away from brand loyalty that was already being driven by the millennial generation (born 1978 - 2001). That generation is much less inclined to define themselves by conspicuous consumption of specific brands, said Ted Manning, VP of merchandising for Eastern Mountain Sports (EMS).

“The customer is coming back to the concept of minimalism and core functionality and not excess,” said Manning, “There will be less brand loyalty.”

Still, national brands will continue to play a major role at EMS, which continues to grow its own brand of apparel. “We have not headed into recession by throwing out national brands,” Manning said.

Below are examples of how retailers are adapting to consumers’ new frugality:

Loading up on basics and accessories that are priced below $25.

Shifting down within a brand. Rather than cut premium brands, buyers are bringing in more of their entry-level product. The good-better-best mix is shifting more toward better.

Bundling product on the equipment side to lower the cost of entry for your core sports. For instance, bundle a boat, PFD and paddle to show entry-level paddlers how inexpensively they can getting into paddle sports.

Bringing in new brands. Specialty retailers are giving more widely distributed value brands another look.

Expanding and/or promoting private label offerings.

Buying overstock and close-out deals. Many retailers who cut back their pre-season orders are aggressively buying overstock and closeouts to ensure a steady flow of deals.

Local Artist with His Arts-Kids Created Bus Shelter

American's Delusional Regarding Their Health

Most Americans believe they are in better-than-average health for their age.
More than 1/2 of surveyed men and women believe they are in "good" or "excellent" shape.

After 18, lots of people drop out of sports, especially team sports.

45% of people surveyed didn't participate in any sports activities in 2007.

The 3 largest reasons for not participating:
**don't enjoy sports or fitness
**injury or health problem
**not enough time
Other reasons: too expensive and lack of opportunities to play

What would motivate them to participate:
**less expensive equipment/fees
**doctor's recommendation
**less intimidating atmosphere
**tax deduction for the cost

40% of male and 24% of female said NOTHING would motivate me!

Of the 55% who did participate, most popular activities:
35% fitness
23% outdoor sports
21% individual sports
11% team
11% water
8% racquet
6% winter

What would drive them to participate more:
50% more time
40% more disposable income
30% spouse/family member participation
30% better access to facilities
20% more organized activities

What would drive them to spend more money on sports:
55% more disposable income
26% tax decuction
18% test prior to purchase
17% innovative, new equipment
29% nothing

What is needed is more innovation and smarter marketing. Messages to the baby boomers, messages about the positive impact (and yes, congress is going to receive a bill about tax deductions for certain types of exercicse equipment/use fees).

Washington needs to provide backing (75.7 million in PEP grants will be awarded to schools and community based organizations). Washington needs to prevent sickness, not just provide after the fact.

Be Environmentally Cool
Head Local
Green Local

29 Miles Per Gallon

06/17/2008 18:30 Mountain

Hello Friends,

Thank goodness for technology.

I recently took a road trip from Park City, UT to Denver, CO, stopping in many resort towns along the way. My Ford Escape SUV Hybrid, loaded down with camping gear and Locals Have More Fun clothing hummed along at 29 miles per hour.

Steamboat Springs, Edwards, Avon, Beaver Creek, Vail, Frisco, Breckenridge, Dillon, and Silverthorne were hit in on Friday. Denver, Boulder, Golden, and Aspen were hit on Sunday.

There is something to be said about that Rocky Mountain High. It was great to be in a state with somewhat normal liquor laws (3.2 beer is still envogue). A high five was given as we crossed the state line into Colorado and the Tabernacle Choir welcomed us across the state line into Utah as we passed Dinosaur.

Locals had a strong weekend with a strong performance in a weekend fair in Holladay and then in Colorado with a strong response from soft goods buyers in the resort towns and healthy meetings with sales reps and our screen printers.

The momentum is gaining and Locals will be able to offset its carbon footprint, educate, and give back sooner than thought.

Have a great day,
Head Local