It’s 2010, Let’s Get On With It

Welcome to the first work-day of 2010. You ready?

I’ll tell you, I am. Well, that might not be the truth. It’s more the truth to say that I’m ready to be done with 2009. In all of my years as a rep in the outdoor industry, or – forget that – as a small business owner, 2009 was certainly the most challenging. Something that never happened before happened every single month in 2009. Rarely was it a good thing.

I’ve heard the same from others. You know what I’m talking about.

Is 2010 going to be better? Yeah, I’ve got a feeling that it will, if only because we’ve accepted disruption as the new norm. The ocean’s not going to get any calmer perhaps, but we’ve gotten more used to swimming in big waves.

But it’s more than a change in perception and some better sea-legs that will make 2010 better. It’s also an understanding that the waters are changing. I could push the metaphor a bit, and – hell – I will: The waves of 2009 weren’t caused by winds. They were caused by deep swells coming up from the bottom of the ocean, and a change in the very movement of the seas. This ain’t no El Nino or La Nina. The currents are changing, forever. Shorelines, habitats, and climate will change everywhere the currents touch. (And this is to say, everywhere…)

So what does this mean? Looking into my crystal ball for 2010 and beyond, from my limited perspective here’s what I see:

For manufacturers: Smarter people than me have said it better than I can, so it shouldn’t be new news to say that the supply chain in the outdoor industry is broken. The models we’ve used to design, manufacture, and market product have changed and they will continue to change going forward.

Part of this is a supply-chain issue, and part of it is demand. People are buying products differently. This isn’t just a change in the way that retailers are buying, so you can quit saying “If only these retailers would figure out that we can’t make product if they don’t tell us in advance what they want.” Their customers – the consumer – are changing habits forever. Manufacturers will be expected to absorb the brunt of this, and for good reason: The retailers can’t do it quickly enough. (This is to say that the bulk of them aren’t at the moment positioned well enough to absorb these changes on their own.) Manufacturers will be expected to have the right product when it’s needed and not a moment after. Innovation is important for the brand identity, but there will always be somebody with a similar product at a similar price and if they can deliver faster and better, they’ll sell it better.

But wait, there’s more: Because consumers are demanding it, manufacturers will need to meet these challenges sustainably. Where, how, and what products are made from is more important than ever, and consumers have more windows on a manufacturer now than ever before. Values-based consumption is not just a fad. Habits have changed, for good.

To this end, don’t forget the abstracts: “Transparency,” “Authenticity,” and “Integrity” are more than just words-of-the-day. (And while we’re talking about abstracts, don’t forget “Engaged”; it’s the whole social-media thing, but I’ll get back to this in a second…)

And – dang – about preseasons, forecasts, and projections? Not happening as much as they used to: Nobody really knows what’s going to happen anymore. They’re making it up as they go along, and reacting more than acting. Manufacturers are left holding the bag to make sure that people have what they need when they need it, and if you don’t have it somebody else will. So commodities need to be sold like commodities.

The other option? Be like Apple, Google, or Nike, and drive the market by telling people what they want before they even know it. The iPhone was a novelty item when it was debuted, and now to those who own one it’s a necessity.

On the other hand, we always have C&H Pure Cane Sugar on-hand in my household…

For retailers: The concept of “specialty” is now more plainly not about having exclusives on brands or product. Consumers can now stand in stores and scan the barcode on every item you stock. From there, they can comparison shop by price, size, and color, and – oh – see similar products from other vendors, as well as what competing retailers stock locally. And, they can order their/your item on the spot, have it on their doorstep the next day, and – for the moment – likely not pay tax on their purchase.

All of this happens with just a few quick movements of the thumb – you probably won’t even see them as they make their purchase and walk out the door. I admit that I’ve done it, and will do it again, and I’m not alone.

In 2010, retailers will need to do more than have the neat new products, in the right sizes and colors, at the right time. Retailers will need to make new products fun, too. Retailers are the outdoor industry’s cultural ambassadors to the consumer, the face-to-face connection with a real flesh-and-blood human. If retailers are talking about the price of the purple jacket, and about its pit-zips, and what a great value it is, we’re sunk. Talk instead about how much fun people can have outdoors in the purple jacket, and maybe also that it’s right there in front of them in their size and favorite color, right now. But – preferably – retailers will focus on getting people psyched about being outdoors, and then the purple jacket (or whatever the hot color of the season is) will sell because people need it because they want to use it. And, given a choice, they’ll buy the one in front of them in that moment if somebody talks with them.

If consumers want an impersonal experience, they’ll buy it on their phone; in 2010, the arrival of the mobile wallet will make this even easier.

And retailers, don’t forget your brand. Consumers need to engage with your particular store before they engage with anybody else. (This includes your vendors.) “Multi-channel” is no longer just on the wish-list of what might happen someday. In 2010, everybody needs a brick-and-mortar, e-commerce, and social-media presence. And if all (or any) of these things ain’t real, in two swipes of a thumb consumers can purchase what you’re selling somewhere else. And will.

For Marketers: Dang, it’s a tough time. Broadcast-based media has ruled the day since Poor Richards Almanack, and now it is no more. We could go all Monty Python on this, but “I’m feeling much better” is just another way of saying “I’m not dead yet.” Over 400 magazines folded in the United States last year, many of them in the specialty channels. When our industry does TV, it makes the news; forget radio and internet. Push-media has become pull-media. In other words, your target has to want to receive your content. You can’t just shove it in front of them.

Whatcha gonna do?

Well, for one thing, it’s not about product. Consider the skateboard market, where the product has remained the same for almost thirty years: Plywood deck, hard-rubber wheels, and sealed bearings are about as good as it gets, just like when I was a kid. What makes the difference in that market? Graphics, style, brand, and culture. In other words: “30% more breathable/durable/lighter than the other guys” is not going to drive consumers to retailers’ doors. What you need to ask is:

  1. Who is our Tony Hawk?
  2. Where is our LIVEstrong?
  3. Why doesn’t hardly anybody in the outdoor industry have over 10,000 friends/followers on Facebook/Twitter?”

That, and be forewarned: The next time I hear somebody in marketing ask,”Well, in this new media, how do we control the brand message?” I’m going to throw a skateboard across the room. It won’t hit you, but I will throw it. Why? Because in 2009 media habits changed forever. If in fact “brand message” was ever controllable, it should be obvious that it’s not any more. It’s not as simple as just putting up a Facebook page and a Twitter feed: Social Media is more than just about having a presence; you have to be there.

If this last statement seems like a Zen koan to you, you’re not ready for 2010.

Last thing: It’s not about Facebook and Twitter. These are just tools, and the tools will change. Looking at these tools and thinking that this is all that the new media is about is like looking at AOL circa 1994 and thinking that THAT was the full potential of the Internet. Social media is not about checking off a box on a to-do list, or filling in part of a matrix of a marketing plan. It’s a whole new way to market, it’s ideas-based, and it’s interactive. Turn off “broadcast” and turn up “listen.” Nobody knows what the next Facebook/Twitter will be, but if you don’t “get” the way these current tools work, you won’t have a hope of understanding what’s next.

For Reps: Never have we been more needed in the outdoor industry, and more at risk. It’s 2010, and by 2015 most of us here in the outdoor industry as reps now will be doing something else. This isn’t to say that we’ll all be unemployed. Take heart. But those of us who are left as reps will not be doing what we have been doing.

We reps have three main jobs: We sell, we service, and we market. Sales? The supply-chain is broken, and the preseason model is broken along with it. If you’re not focussed on driving ASAP’s as the bulk of your sales business in 2010, you won’t make it to 2015. And about those ASAP’s: Both manufacturers and retailers will stake a greater claim on who earned them. Manufacturers pay preseason discounts for the benefit of knowing in advance what to make and when to deliver it; retailers place preseason orders for the benefit of earning discounts. So, if no preseasons are placed, there are no discounts available, and there have always been discounts, right? Where’s that 5% to 10% going to come from, if not from preseasons?

[Cue the theme from Jeopardy, here; look around uncomfortably.]

So service and marketing become more important than ever before. This isn’t just for job security. This is where we reps must provide value. If retailers are the cultural ambassadors and flesh-and-blood connections to real consumers, reps must be the grand wizards, the witch-doctors, the story-tellers of our industry. We’re the ear-to-world, boots-on-the-ground force that is otherwise lacking in our new digital world. Everybody gets from data what they want to get, but it’s only the field-intelligence that shows what’s really real. And we need to provide these services to our customers, as well as to our vendors.

Only reps can influence the kid-on-the-floor, and then share with everybody else what the kid-on-the-floor is thinking. And the two of these things combined will be more important than ever going forward. Only reps can and will be able to provide these services.

I’ve heard the question asked: “When preseasons go away, what will reps do?” If you’re not already answering this question and doing it, um, yeah…’Nuf said.

For All: It’s now 2010. It’s no longer a new century. Ten years ago today, the major worry was – still, four days later – Y2K. Now, when Facebook/Twitter/Google goes down, it makes the news. (And the truth is, most of us have noticed prior…) Most of our practices from circa 1999 are no longer sustainable, or scalable. In light of this, every business practice must be examined.

Key questions:

  1. Why aren’t we using video technology more? Skype, iChat, AIM, and Oovoo, Google Chat are all free; are you using these tools? Why not?
  2. Are you concerned more about what you’re broadcasting to the world, or what the world is saying about you? How do you deal with and respond to the latter?
  3. Do you have metrics to measure what’s being said about you, as opposed to how many people you’re reaching? Impressions mean nothing; engagements are everything.
  4. Must we do things as they have always been done, or can we find better ways?
  5. Travel is necessary, but is it always needed?
  6. Why e-mail?

The tools are there. We don’t need to reinvent the wheel. Other industries have done it for us. All we need to do is pick, choose, and adopt what’s already been developed. It’s time. It’s 2010.

Let’s get on with it. I’m psyched. Aren’t you?

Happy New Year.

ps: If you haven’t read The Four Hour Workweek and/or pre-ordered Rework, you really should do both.

7 responses to “It’s 2010, Let’s Get On With It

  1. “If preseasons go away, what will reps do?”

    There are so many punchlines here I’d have a hard time choosing one.

    The supply chain is broken. Reps as they currently function are anachronistic. The non-snark answer to the question is “Add value.”

    Dumb Rep: “How do I do that?”

    It depends on the retailer, who is, by the way, your customer.

    Dumb Rep: “How do I know what my customers want?”

    Ask them.

    Smart reps will add value and thrive. Dumb reps will complain about manufacturers who realize that they’re giving up commission for no good reason.

    If it sounds like I’m harshing on reps, I am. I’d say 30-40% of the reps we have are adding value in some way. The rest are taking a ride for free. And there are no more free rides.

  2. I will never assume that Brad is having any less than 20 intelligent thoughts at once, while looking contemplative. Well written and great voice! In particular, I’d like to 2nd the emotion “commodities need to be sold like commodities.” I often counsel my clients against ascribing an altruism to something that used to be special that is now a commodity, in every industry (including financial services). I think the outdoor industry, in particular, has been understandably plagued with that issue, mostly due to the heart and soul that is poured into the roots of your companies. As a sleeves rolled up finance type, would also love to hear your commentary on industry pricing models and discounts as we go into 2010.

  3. avatar David Sweeney

    This was in a recent OIA Webnews article: “Retailers planning modest growth in 2010”

    Rod Johnson from Midwest Mountaineering is quoted.

    But it also seems certain that retailers will continue to back away from pre-season orders in favor of buying closer to need. Midwest Mountaineering has changed how it approaches buying, said owner Rod Johnson. Going forward he will leave 20 percent of his OTB available for special buys closer to season and adjust a higher percentage of his pre-season orders prior to delivery. “It’s not like we are planning fewer sales,” he said, “It’s just we are counting on picking up more specials.”

    http://bit.ly/8PtO93

  4. avatar Josh Fairchilds

    Hi Brad,

    As always, thank you for being such a thoughtful member of the outdoor industry. It is encouraging for me to know that there are other folks out there putting serious thought into our business and coming out with compelling ideas. I think you make some outstanding points. I would like to expound upon a couple: The supply chain is broken, but I don’t think the fix is what everyone thinks it will. Nor do I think it is an easy fix. The bottom line is that so long as people believe that those light hiking shoes that cost $100 15 years ago should still cost $100 today, then manufacturers will need to chase cheaper and cheaper manufacturing costs around the globe. This constant chase makes the supply chain increasingly fragile, challenging and constraining. Communicating this to the retailers and then teaching them to communicate it to the consumer is the job of sales reps and the companies that they represent. This is why specialty retailers are such an important part of our business. Without them, the industry goes the same way as electronics and hardware. Remember when your local Radioshack and Ace Hardware were the places to go for knowledge and variety? (Actually, in Bozeman they still are!) Would anyone pay $200 for a trail runner made in the USA in a factory that uses wind and solar power? Pays its employees a living wage? Produces next to zero waste? I don’t know – and I don’t know anyone at this point willing to invest in that risk. But I sure as hell wish I did. Imagine how quickly you could bring new things to the market!

    I heartily agree that manufacturers need to innovate and sell commodities as commodities. Even saying that out loud sounds silly, because it is so obvious. I think one of the biggest concerns for the outdoor industry – manufacturers like me, reps like you and the accounts you call on, and our costumers – is the consolidation of manufacturers. I believe this is the gravest concern for the industry. As fewer and fewer companies control more and more market share, small startups which have been the life blood of our industry will find it harder and harder, if not impossible to compete. The playing field is not level. Look at some of the most recent attempts. Great ideas. Good teams. No success.

    Just some of the thoughts that came to me after reading your entry. A little random and all over the place.

    Again, I can’t tell you how happy I am to know you are out there doing what you do. Keep it up.

    Best,

    Josh

  5. Hey, thanks everybody for the comments! This might prove to be my Jerry Maguire moment, so I’m a little sheepish. The word “manifesto” that’s been floating around Twitter makes me want to hide. But I appreciate your responses. Thank you.

    I’ve been wanting to respond but it’s the regional show this week. Apparently, I do have a day-job, and I have proof: It’s been hard to get back here to give the response that these comments deserve.

    Darren: You know, maybe I didn’t think this through entirely. The truth is that preseasons aren’t going to go away, but our concept of “season” needs to change. We’re divided into a two-season year in a market that has evolved into a four, five, or maybe even six “season” cycle. For instance, we could have “Back To School,” “Holiday,” “Spring Break” and so on. This would mean that the industry would always be creating/debuting/selling/buying/adjusting, but with smaller collections of targeted product.

    Manufacturers could innovate, plan, keep people busy year round, and not have to ship so much product at once; not incidentally, they wouldn’t have to extend so much credit in big chunks. If a “season” went bust because of economic angst or terrorist attack, there would be another one right on its heals so we could bounce back. They wouldn’t have warehouses full of dated inventory.

    Retailers could plan, keep their stores fresh, follow trends, and not have to commit to the equivalent of the average home in Madison in a preseason order that could all go *poof* if/when a weather-pattern changes.

    And reps would always be showing product, both for preseason and ASAP, and spreading the cultural vibe, year-round.

    RE: “Dumb reps.” Sigh. Sorry to hear that. Hope it’s not us. We try to be professional, and I think that most reps have the same intention.

    So, Josh: About that multi-season model, can investors invest in that? Instead of saying: “We would like you to invest $75million in floating six month’s worth of inventory that all hinges on whether we got the right yellow,” you’d present it as three seasons each of $25million, each contingent on the prior.

    Honestly, I don’t know how it works as I’ve never been in your shoes. It just seems like smaller caps of revolving credit to fund tighter collections that are designed to sell-through would get more investment interest. (This might not work in footwear, granted…)

    Kira, does this sound right? I mean, for the investor side.

    Regarding credit, this does tie into Josh’s comments about consolidation. We work for Mr. Coffee and Mrs. Boyle. We get tremendous resources, and funds for innovation, too. But it’s hard to come to market with niche products and pay for the R&D. (So I’ve been told.) On the credit side, we frequently bounce against credit caps. So – yes – there are times when we can’t sell product because one of our customers has reached the limit with another brand in the same household.

    It’s more exposure for the retailers, too. In times past, they had $50,000 worth of credit from 20 vendors and had a $1million total. Now, they need to qualify for $1million under one umbrella to get the same goods. Many can’t do this now, so…

    Discounts aren’t going to go away. The demand for discounts is going to increase as everybody bumps up against margin ceilings. That, and a little bird told me that deeper discounts are going to be a requirement in the latter half of 2010 at several, er, “large-ish” retailers. If/when they do this and if they’re successful in getting vendors to comply, everybody else will want them, too.

    Regarding margin, if retailers, vendors, and reps need to be multi-channel, we all have to be able to support the maintenance of these investments. (Anybody who says that internet has no overhead hasn’t paid hourly rates for code.)

    So back to Josh’s point about retail pricing: It’s absurd that prices keep dropping, expenses keep rising, and margins keep shrinking. This is not sustainable in so many ways, it’s dizzying.

    We can’t lose money on every sale, and make it up in volume.

    Let’s sell high-quality, fun stuff that lasts, and price it what it is.

    Yeah, that does sound crazy to me, too.

  6. Regarding those multiple seasons, we have four seasons now…

    August-October: Fall Preseason
    November-February: Fall Closeout
    March-May: Spring Preseason
    June-July: Spring Closeout

    The only difference is that during two seasons manufacturers are giving product away..

  7. Let me clarify.

    RE: Dumb Reps: I know two. They’re trustafarians and don’t need to make money.

    Unenlightened, inflexible reps: Well, I know more than two.

    Probably unfair to pick on reps. The world is divided into two groups of people – those who are on a growth trajectory, and those who are content to keep the status in its quo.

    All it takes is an inquisitive mind. “How could I do this better?” “Why do I do it this way?” “What I can do to be more effective for my customers?”

    It’s harder to live life that way, but the consequences for staying on the merry-go-round instead of the roller coaster are, for me at least, pretty scary.

    And for those who prefer the merry-go-round, that’s fine. I just hope it works for you. It’s my experience that it often does not.

    DB