Independent Retailers on What They Learned in 2020 and How They Are Planning for 2021.
We spoke to specialty retailers about the year that was and the year ahead. During a year defined by the COVID-19 pandemic, outdoor retailers saw high demand and scarce product across categories like paddlesports and cycling. As the weather has changed across the country, the product demand (and scarcity seen in the summer) has been replaced in some spots with the same issues in snowshoes and ski.
But that’s not to say that’s nothing’s changed. In fact, retailers who spoke to Outdoor Insight said that 2020’s once-in-a-lifetime challenges and disruptions have led to changes in their business models for the year, if not longer. Here, independent retailers share what they’re expecting for 2021.
1. Reconsidering Inventory (and Relationships)
The supply chain challenges from shortages to shipping delays that characterized 2020 have led many shops to rethink the way they plan their merchandise flows — and with whom they want to do business.
“From a buying perspective, it’s more complicated,” said Mike Donohue, co-owner of Outdoor Gear Exchange in Burlington, VT. “With the vaccine out and about, there’s a light at the end of the tunnel, but in all honesty, I don’t think a ton is going to change before June — although it may be May or it may be September,” he said.
Donohue said Outdoor Gear Exchange, like many outdoor shops, saw a combination of super-strong demand and scarce availability in 2020 for hardgoods including paddlesports equipment, bikes, ski equipment, headlamps, ice climbing gear, traction, and bikes. (Donohue noted that even basic bike repair products, like brake pads, were in short supply.)
“In a normal year, you can try and buy around it,” Donohue said about brand and item shortages. “This year, everyone is sold out.”
To counter the problem going forward, he said, Outdoor Gear Exchange would “choose some winners and buy deeper. What we’ve learned it’s harder to chase inventory and have it [actually] come in.”
Mike Cosentino, owner of the seven-store Big Peach Running Co. run specialty chain headquartered in Atlanta, GA, said his team is looking at placing bigger orders earlier.
“For us, [looking ahead] has at least as much to do with procurement as planning. We’d rather take less shipments over the next six months, which reduces the unpredictability,” he said. Cosentino said the chain has been floating that plan to key vendor partners, and would be asking for dating and terms to be tweaked to facilitate larger, front-loaded orders. While the plan will require more warehousing and carrying more inventory, he said, the advantages to both Big Peach and its partners could be more fewer fill-ins and lowered chances for shipping delays — to say nothing of lower shipping costs. (Big Peach takes shipping logistics seriously: The retailer hosted a UPS president at its annual meeting last November to discuss the current delivery congestion and long-term outlook.)
Frank Gibbons, a buyer at Sam’s Outdoor Outfitters in Brattleboro, VT, said his shop is making the same calculation. “We’ll book everything for first delivery a little heavy,” he said.
And while Gibbons and Donohue said the importance of maintaining inventory health is critical, for at least the next few seasons, they’re weighing it against the risk of empty shelves.
“You gotta replace the stuff that you sold so you get a chance to sell it again,” Gibbons said.
Part and parcel with the changes in ordering, retailers told Outdoor Insight that they’re rethinking their relationships with vendors after a year of challenges — and that brands with more secure supply chains and greater visibility are the ones with which they want to work.
“Brands that are transparent are going to be favored,” Gibbons said. “If I know what you’re doing and you know what I’m doing, then we can work together.”
“We’ll be shifting some of our orders to people who are better at supply chain issues than others,” Darren Bush, owner of Madison, WI-based Rutabaga Paddlesports, agreed.
2. The New Real Estate Reality
There’s no doubt that the pandemic and associated shutdowns roiled the commercial real estate market, which was hit hard by increased vacancies and a destabilized market. That upheaval, however, has meant opportunities.
Minneapolis, MN-based independent Mill City Running opened its second location, Saint City Running, in neighboring Saint Paul at the end of 2020, thanks to what co-owner Jeff Metzdorff said was a marked change in the landscape.
“We’d always been priced out of Saint Paul, and anytime anything came available, it would quickly go off the market,” he said.
But after coming out of Minnesota’s two-month shutdown last spring, Metzdorff said he and his wife, co-owner Bekah Metzdorff, found a “fantastic real estate opportunity” for a 1650-sq.ft. storefront in Saint Paul in an area with lots of development, new restaurants and shopping and close to running and walking spaces.
“People are looking for solid tenants,” he said, noting that shops that have weathered the pandemic (especially in resilient channels like running and outdoor) are especially desirable.
“You’re able, if you’re a strong retailer, to dictate terms,” he said. “We’re looking at this as a chance to double down and get into an area that’s historically been extremely tight. We want to take advantage of something that others might see as a tough, negative situation and use it to our advantage.”
3. Maintaining Sales Flexibility
The many paths to make a sale were never wider for many shops than during the pandemic, when shutdowns and restrictions meant getting creative. Curbside pickup, online/web stores, social media sales, local delivery and virtual consultations all opened up new sales methods, and most stores said they continued to see consumer appetite for them in 2021.
“It’s been dramatic — if we offered people a way to shop with us, they would,” Rutabaga’s Kate Westphal said of the shop’s customers. Bush said appointment-based shopping, in particular, has been a upside to the store that will carry forward.
“Appointments help the staff be prepared for what the day will bring, and the customers appreciate it. Some of the sales are really involved here; it lets us assign people so you get the right person for you, right now,” he said.
4. Opportunity Ahead
As stores move through 2021 and beyond, retailers said they see opportunity, even as other categories, like travel and restaurant meals, retake some of the share they may have ceded to other categories.
Outdoor Gear Exchange’s Donohue said he thinks the deeper connections consumers forged with the outdoors will be a boost for shops in 2021.
“We need to learn how to be adaptable and continue to learn. Once this things come back, there’s gonna be less money for outdoor recreation,” he said. But there’s opportunity, he said: “People were able to reconnect with nature and the outdoors and discover new things, and some of those were changes in lifestyle to hopefully last a lifetime,” he said. What outdoor stores can be proud of and benefit from, he said, was “our ability to give some normalcy and stress relief, and to be a place where people are working on personal goals and achievement.”
Rutabaga’s Bush said he’s planning positively for 2021.
“We learned more this year than we did in the last five,” he said. “We’re going to move forward as if everything is going to go great, because we’re retailers — that’s what retailers do.”