Surfing The New Seas: Myths of #OIBIZ Internet Retail

We here at PEMBA are pretty fond of saying,”You can’t control the ocean, but if you read it right and are willing to get wet, you might catch a good wave every once in awhile.”

Okay, it’s wordy, but we like it. Basically, to us it means that we can’t control the world, but we can put ourselves in a position to enjoy it (or benefit from it) if we pay attention and are willing to take some risks.

Most of us in #OIBIZ are risk-takers, otherwise we wouldn’t be here. Still, in these dynamic times it’s hard enough to keep one’s head above water, let alone get an eye on the breaks with a mind towards catching a big wave. When breathing is enough of a challenge, the idea of surfing is out of reach for most of us.

So, we’ve begun a series of guest posts from people who can give us different perspectives on the changing waves of our industry, business in general, and in our world as well. Today’s is from Erik Viafore, and – well – we’ll let him tell you all about it…


Hi, my name is Erik, and I am a Brand Developer in the Outdoor Industry. What is a Brand Developer? Well, it is someone who helps brands get exposure and strengthen their name in the marketplace.

Why is this statement odd? Well, I am also an Internet Retailer.

For some of us, it took a little while to realize that this was part of our role in life. We started with the grand idea of ‘selling things on the internet’ and suddenly – one day – we woke up and realized we were doing much more than that. So you ask, “how can one help develop brands and also be an Internet Retailer?”
It’s pretty easy, actually. Here are some of the things that Internet Retailers do every day that help brands to get exposure:

  • Our Market is BIG: The ‘world wide web’ is, indeed, world wide. We give brands a presence (and often a substantial push) all over the globe. Our newsletters, our websites, our blogs, our Facebook pages, our Twitter feeds, our catalogs are all centered around promoting the brands we sell. Can you say “6 figure ad budget”? Yeah, and that’s for the small guys.
  • Your ZIP is my ZIP: For the most part, we can put a brand’s product into any Zip code that we can ship to. Can’t find Product X locally? No problem, someone online probably sells it and can get it to you.
  • We Create Demand: Have a small brand with limited distribution? No problem! If you have buzz and a growing interest among consumers, Internet Retailers can get your brand out there in the hands of people who, after all, are your greatest advocate. Pretty soon you will have local retailers calling you to get stock. Really?? Yep, trust me, we see this ALL the time. This really is one of those win-win-win situations where everyone benefits.
  • Price Transparency: One thing that the Internet is very good at doing is aggregating data. This means that it is VERY easy for a brand to monitor its Brand Image, pricing or other policies and make sure everyone is playing by ‘the rules’.

There are also some things that Internet Retailers are not. Let’s classify this as the section where we dispel some myths.

Myth: Internet Retailers are discounters. Do online discounters exist? Sure, but many of them don’t exist for long. The truth is that an Internet Retailer doesn’t have fewer expenses than a brick and mortar store, they just have DIFFERENT ones. While we don’t have large sales staffs to train and worry about we do have HUGE advertising budgets, pay loads of money to shipping companies and invest heavily in technology. At the end of the day our margins and bottom line look pretty similar to the corner specialty outdoor store. SOO….like any retailer, the good ones realize this and they are the ones who protect their margins and, ultimately, stay in business.

Myth: Specialty Outdoor Stores can’t compete with the internet. SURE THEY CAN! You don’t have to have an MBA to realize that just like Internet Retailers, Specialty Outdoor stores fulfill a valuable and sustainable niche. Truth is, if a customer walks into a Specialty Outdoor store and says, “I can find Product X for $ with Free Shipping and no tax, can you match that?” then that shop should remember who their core, long term, sustainable customers really are. The reality is that the typical “price shopper” isn’t my customer nor does it belong in Specialty Retail. Why? Because “price shoppers” ARE NOT LOYAL and we all want loyal, high value customers. If a ‘good’ customer asks this question, work with them and gently remind them why you are different and what value you represent.

Myth: The product we sell in the Outdoor Industry requires on-hand, special and in-person attention. Ok, this can sometimes be true, but I’ve really only seen it in very rare cases. Why? Well, the answer is pretty simple. First, if someone REALLY wants your product and can’t get it, why would you turn down the opportunity to allow them to purchase it? Second, remember you lay the ground rules for your Brand. If you want a retailer (any retailer) to receive special training for servicing your brand, require that of the Internet guys as well. Is that even possible? Sure it is! Our staff is trained to fit backpacks, knows how to tech service Shimano parts and are even certified Thule Rackit Scientists. At the end of the day, we want to represent your brand just a well as you do!

Now I am sure these somewhat random and abbreviated thoughts will stir up comments and fervor from many people so I will leave you with three additional thoughts, albeit possibly biased ones. First, even as an “Internet Retailer” our sales showroom does quite well with local traffic from local customers looking for a specific Brand. Second, Internet Retailers and Catalog Retailers are really very similar in a lot of ways. Catalogs have been mainstream for over 100 years. Third, there is plenty of room in the market for all of us once we all realize there are unique roles that we can play and be successful.
My role? Hello, I’m Erik and I am a Brand Developer.


About the Author: Erik Viafore is a Brand Developer for the 90 or so manufacturer’s products that he current sells. When he isn’t developing those brands or the brands of his two main sites (Mountains Plus, www.mpgear.com and TinyTrekker, www.tinytrekker.com) he’s having fun in the Pacific Northwest with his wife and two little boys.

::..
 photo: Japanese Sea / Makoto Kawata

6 responses to “Surfing The New Seas: Myths of #OIBIZ Internet Retail

  1. avatar David Sweeney

    Interesting timing that the SNEWS / OIA call to action is happening at the same time we ran this.
    http://www.snewsnet.com/cgi-bin/snews/OIA_asking_SNEWS_readers_block_Leegin_repeal-050710.html

    What do folks think of the Discount Pricing Consumer Protection Act and how it could effect the relationship between Brick and Mortar Specialty Retailers and Online Only Retailers?

  2. Hi David,

    I think to emphasize a point I was trying to make, many ‘Online Only’ retailers don’t like the idea of the new issues with the DPCA any more than B&M Speciality Retailer do. Any of us who are ‘smaller’ are at risk from predatory competitive practices like deep discounting from LARGE retailers like Walmart and Amazon.

    The issues with margins and maintaining my bottom line are the same whether you have a store front or a website. Really large retailers have the ability, however, to out-price and kill competition because of their scale while the rest of us live is a more defined world of margin protection.

    So, in my humble opinion, the only ones who will benefit from Sen. Kohl’s efforts are the really large retailers who can take loses in order to gain market share and kill competition.

    Do as the OIA recommends, and write Congress…NOW.

  3. Very cool discussion… thanks for putting yourself out there! I’m curious how you see Internet Retailers in the context of spurring participation and excitement among people who don’t currently participate in active outdoor activities.
    Large and small B&M dealers and brands activate in regions and communities to spur participation (REI, TNF, EMS,Rutabaga, Rock/Creek, etc…). I haven’t seen internet dealers (maybe Mountain Gear, who is rooted in B&M)really taking this charge seriously. Yet. Maybe in exchange for local/state taxes you don’t have to pay, you might volunteer that support to help grow the entire pie… or is this too simplistic?

  4. avatar Brad Werntz

    Kenji, as I understand it retailers don’t actually pay sales taxes, consumers pay them. As such, online retailers don’t have “extra” dollars in the tank from sales taxes to contribute elsewhere.

    I’d also give shout-outs to Backcountry.com and Moosejaw.com for “increasing the pie.” While the latter, of course, has its roots in B&M, too.

    Growing the pie, now there’s a concept. Let’s stop trying to figure out how to slice it thinner and more fairly. Let’s just get so much damned pie that we’re all fat and roly-poly. How’s that?

  5. Hi Kenji

    I think it really varies but, speaking for ourselves, I can saw some internet retailers are very active with their customers and their communities. For example, we have been very active in the local adventure racing community for almost 7 years now. We’ve done everything from staffing CP’s to holding educational events to help grow the sport. We participate in local cycling events and, this year, we hope to be involved in a summer outdoor program for kids in our community.

    I will say, however, that doing this is a bit tough. When you have B&M its easy to identify yourself with ‘that shop’ down the street and have some expectation that people will someday walk in your door. Providing this kind of support as an Internet company turns out to be substantially different. When local people realize that they just can’t ‘walk in’ there is a level of disappointment that we observe.

    Consequently, we’ve looked at our local, community based initiatives as simply ways to expand our brand awareness and to grow participation in areas which we represent. So far, it seems to have worked OK for us.

    Again, I can’t speak for other Internet companies but I am guessing that many do more things than you would know. It’s local, so it just doesn’t get the national exposure that their brand does.

    Thanks for your comments!
    Erik

  6. Interesting set of stats from Leisure Trends (as reported consistently here at the Mountain Hardwear sales meeting): Internet sales across the board increased tremendously in 2009 and YTD 2010 as both a percentage increase and as a gross percentage of sales. In some categories, Internet sales account for >40% of the total.

    New: Average pricepoints for sales on the Internet are SIGNIFICANTLY higher online. The reason? As the economy crashed the ONLY place you could find a premium product was on the Internet. So, about that “Internet/Low Pricepoint” myth: Definitely ain’t true.

    Specialty: Are you listening?