Everyone knows the outdoor market has been plagued with challenges recently. That’s nothing new. But where are the bright spots?
To answer, The Daily set out to shift the conversation and look at what’s working with specialty retailers.
One takeaway is retailers need to own a niche, whether running or ultralight hiking or another outdoor focus. Zeroing in on a particular activity helps to brand the store and set customer expectations.
Also, holding firm on price has been a key strategy for some shops; others report success with using inventory consultants to set pricing and assess inventory.
Interviews with retailers across the U.S. (and one in Australia) uncovered several ways stores are challenging the overarching industry narrative. It’s not all doom and gloom. Many are finding ways to adapt and achieve success in today’s market.
Running Up That Hill
With more and more people trying to get active, “business is great,” said Brittany Katz at Terra Running Company in Cleveland, Tennessee.
“People really have continued to see the benefit of staying active for mental health and for physical health,” she said. “And what better place to do that than outside on the trail.” Brittany Katz, owner, Terra Running Company
Katz has seen great products from established specialty running brands that a customer can take on the trails or to Disneyland.
Terra Running Company in Cleveland, Tennessee. Photo courtesy of Terra Running Company.
“That feels like an economical purchase for a lot of people,” she said. “They can see themselves using it for a lot of things. It doesn’t necessarily have to be a commitment to hardcore anything, you can just use it for your active lifestyle.”
Katz called out Hoka and On Running as two brands with some of the best technology in the running industry.
“And a guy on the street would tell you they just look really good,” she added. “Both of those have helped put the industry on the map for non-runners.”
Shoes that can be used for technical pursuits while also looking great have been good for Terra’s bottom line.
While Hoka and On are selling well, Brooks has maintained the No. 1 footwear spot in her store. And for nutrition, Tailwind and Honey Stinger are both strong. For sunglasses, the store can’t keep Goodr in stock.
Another area where Terra has been successful is white-labeling its brand. After being in business for about eight years, the store is gaining brand recognition. Terra brands its store name on good quality technical apparel and socks, and the products are a hit, according to Katz. Margins on Terra’s white-label products are 10%-15% better than those of other brands.
“It’s great when competing with the online, direct-to-consumer market where all of our brands are selling directly to customers and we’ve got to match those prices,” she said. “We have had a lot of luck and are very hopeful about pushing our own brand.”
Keeping a Tight Focus
Avoiding the filler and staying with the killer merchandise is the name of the game at Big Willi Mountaineering Company in Lone Pine, California.
Owner Blair Nicodemus said the 295-square-foot store is one of the smallest mountaineering shops in the U.S.
“It’s all stuff you need,” he said. “No soccer mom stuff. All tried and true mountaineering gear that can be used in the field.”
Nicodemus is hoping the year is going to end up strong, but he’s worried about inflation and spending on luxury items like camping and hiking gear.
“I think people will be a little apprehensive about spending money on recreational items,” he said. “Most stuff in the outdoor industry is a want and not a need.”
In anticipation of a lean year, Nicodemus is “tightening the belt,” only spending about 80% of what he spent last year on new products.
Blair Nicodemus serving a customer at Big Willi Mountaineering in Lone Pine, Calif.
“I’m going to watch my spending because I don’t know if my return on my investment is going to come back,” he said.
The store is along the popular Pacific Crest Trail thru-hiking route, so Big Willi will continue to stock the essentials, including fuel for camp stoves and backpacking meals.
“People are still going to need to cook and eat,” Nicodemus said.
About 25% of Big Willi customers are thru-hikers, 25% are repeat, if infrequent, shoppers, 25% are random tourists who happen to be in Lone Pine, and 25% come in the store at least twice a week.
Those repeat shoppers are coming to him for local knowledge about what’s going on in the neighboring Sierra Nevada mountains.
“That’s how I’ve survived,” Nicodemus said.
“I live and breathe these mountains. People come to me because they’re going to get the straight dirt, the real information about what’s going on.” Blair Nicodemus, owner, Big Willi Mountaineering Company
Nicodemus has a group of people he talks to after they recreate in the mountains to find out conditions and other information. He then posts a daily report on Big Willi’s Instagram and Facebook pages. It only takes about an hour of his time to give people a general idea about what’s happening.
“I love what I do. I love being here and I love these mountains,” Nicodemus said. “I can provide them valuable information that will make their trip just a little better.”
The other draw is the customer service he can provide by sharing his product knowledge.
“Everything in my store is something that I either own, use, or have tried over the years,” Nicodemus said. “I have actually put it to the test and believe in it. It has to have my seal of approval — Big Willi tested.”
Stick With What Sells
Down Under the economic picture isn’t much different than what’s going on in the U.S.: high interest rates and a rising cost of living.
In response to these consumer impacts, Wild Earth, a retailer based in Queensland, Australia, is highlighting the categories that are working, including travel and trail running.
“Inventory is still high, so there’s still a lot of discounting in the market,” said Brody Clarke, buying manager at Wild Earth.
In the travel sector, rolling and carry-on luggage and travel accessories like packing cells are strong sellers. Many of the store’s customers buy travel gear to fly to Japan during the winter.
Wild Earth in Brisbane, Australia. Photo courtesy of Wild Earth.
Osprey and Gregory are key brands in the backpack space, and The North Face’s rolling luggage and Patagonia’s duffels are doing well.
In trail running, Wild Earth stocks more than 100 styles of shoes. While the category is overstocked and production is outpacing demand, Clarke said the segment is still growing and sales remain robust.
Patagonia is the store’s standout in apparel, partly because of the sustainability story the brand tells as well as the quality of its products. Arc’teryx’s popularity in China means Wild Earth is receiving more online orders for the brand’s outerwear.
Overall, Clarke is upbeat about the prospects for the outdoor market in Australia.
“There’s more foot traffic coming into the stores and more first-time customers who might purchase something online or something cheap, then they’re coming back for premium products,” he said.
Riding the Ultralight Wave
As a counternarrative to the struggles in the outdoor industry, Lloyd Vogel, CEO at Garage Grown Gear, said sales at his e-commerce-based shop are up about 40% compared to last year. He attributes it to the product diversity the store offers as well as being nimble.
“It’s certainly tumultuous for a decent number of our brands. We’ve seen some of our brands close, we’ve seen brands downsize, we’ve seen a lot of brands reconfigure what they’re doing,” Vogel said.
“From a retailer standpoint, we’ve been able to pivot quickly to ride products that are selling hot, and we’ve been able to lean in in certain spots and back out in others.” Lloyd Vogel, CEO, Garage Grown Gear
Minnesota-based Garage Grown Gear brands itself as a store designed for ultralight hikers. This specialization has been key to the store’s success, according to Vogel.
“We try to find spaces where there isn’t a lot of competition,” he said.
He pointed to brands like Black Diamond making more ultralight products as a good indicator that there is more interest in the market.
A lot of the newer entrants over the past few years have made product purchases to get started with an activity, and the next step is to buy an ultralight version of that product, Vogel said, from battery packs to sleeping pad pumps to headlamps.
Lloyd Vogel of Garage Grown Gear in Minnesota. Photo courtesy of Garage Grown Gear.
Brands are also innovating in these areas, according to Vogel, releasing newer, lighter products all the time.
Vogel pointed to NEMO Equipment’s Tensor Extreme insulated, ultralight sleeping pad as one example of a hot seller.
“That’s a product that really pushes our values in ways that are really intriguing to folks,” he said.
Other notable products include Flip Fuel’s device that allows for transfer between fuel canisters, Flextail’s one-ounce sleeping pad pump, and Nitecore’s Carbo 2000 battery pack.
“All of these accessory items make the outdoors more accessible, and they create some creature comforts and spaces without having to be extremely heavy,” Vogel said.
Another way the site bucks the trend is it’s harder for them to keep products in stock versus the inventory overhang many other retailers are reporting.
“Often, working with our smaller brands means that there are capacity issues,” Vogel said. “One person can only make so many dry bags during the course of a month.”
In May, the site runs a sale as part of Small Business Week, where about 100 of the brands it carries are featured.
“We publish a list that all of them have to cross promote to be involved in this that showcases all of the sales that are being run across the small brands in the ultralight industry,” Vogel said. “Trying to find new and different ways that are not just like, ‘We’re putting our stuff on sale.’”
Inventory Solutions
At Water Stone Outdoors in Fayetteville, West Virginia, owner Holly Fussell has had success from building a strong team of workers and updating the store’s systems, including its POS program.
To buy and manage inventory, Water Stone works with Outside Looks. The service offers consultation by using a third-party data analyst to watch sales trends, inventory levels, and past performance, and to aggregate data from other similar shops.
Accessing these resources has reduced Water Stone’s cost of holding inventory while chasing the proven performers in the store.
Water Stone Outdoor staff. Owner Holly Fussell is on the left. Courtesy of Water Stone Outdoors.
Working with the service might require more effort than traditional retail practices because the store does more frequent buying and discounting than it otherwise would do. “It’s been really successful for us,” Fussell said.
One reason Fussell went with Outside Looks is because she was taking over a shop without historical knowledge of the local climbing community. “I was coming in and I knew I didn’t have that,” she said. “I knew I couldn’t get that overnight.”
The consulting service has since paid for itself multiple times over, according to Fussell.
Water Stone has also benefited from the nearby New River Gorge recently being designated as a national park. It has helped bring in customers who are either tourists visiting the area or locals who need supplies to explore the park, Fussell said, and she is trying to appeal to both sets.
The store has always been focused on climbing, but Water Stone is now offering a wider variety of products as well as an expanded coffee shop and a beer garden.
The Water Stone Outdoors coffeeshop. Photo courtesy of Water Stone.
“We spent a fair amount of money transforming the back of the shop into a hangout spot,” Fussell said. One of the strategies there is to attract people to the store with lower price point opportunities like beverages.
Store workers have coffee tokens they carry in their pockets they hand out to new visitors to get them to come back for a coffee or beer.
As for expanded products, Water Stone has increased the depth and breadth of its apparel, Fussell said. They’ve been spending on more T-shirts that say national park and Fayetteville, for example, after their consultant advised them to add dollars in the category.
Staying Firm on Full Price
Up in Michigan, Tracy Mayer at Backcountry North in Traverse City had to work through a disappointing winter without much snow.
Despite obvious challenges with weather and overall economic picture, Mayer stocks exciting new products she keeps on the racks at full price.
“I stay away from things that are constantly discounted,” Mayer said.
Inside the Backcountry North store. Photo courtesy of Backcountry North.
Retailers that traditionally attracted customers by offering promotions and discounts are in a different “boat” than Backcountry North, Mayer added.
“Our goal is to find a product that is a good value,” she said. That means no matter the price, the merchandise is exciting and attractive.
“I actually find customers don’t buy things from me when they’re on sale,” Mayer said. “The reason they’re on sale is because they didn’t sell. No one wants stuff that didn’t sell.”
Customers want the best price, but “they want what they want,” she added.
Mayer said there are some brands customers are willing to pay full price for, including Patagonia and Vuori. Also popular in the store are Western Mountaineering sleeping bags and Osprey backpacks.
“We’ve been doing this for a very long time, and my staff is very involved with customers and seeing what’s selling and watching the trends,” she added. “It’s our job as retailers to do a good job doing that.”
Hear from more retailers on their current strategies during the “Retail Reality Check” panel session at Outdoor Retailer Summer on Day 2, June 18, at 2:30 p.m. in The Camp.
