The Scandinavian Outdoor Group (SOG) initiated a webinar day for its members in June to share best practices. In response to the question of what outdoor distribution might look like after Covid-19, Martin Kössler has summarized one of the webinars, adding valuable insights and key findings from SOG members’ surveys. 

Who will be left when the storm has settled?

Covid-19 has disrupted our business in two ways: it has temporarily halted almost all offline business and accelerated the digital shift by three years in just three months (Amazon had predicted today’s online market share for 2023). Before the lockdown, many markets had already experienced a warm winter followed by a cold spring. Many previously healthy companies were faced with double bad luck and went into lockdown already battered. In addition, some companies were struggling with growing overhead cost, inefficient logistics and digital transformation. Some businesses will die because of and during Corona, but not from Corona. Our industry is recognized by a growing number of investors, and some companies will emerge from this period with new financial resources, but we still forecast accelerated consolidation within the coming year. For those who endure, this means more room for growth.

The new distribution landscape

Most online retailers and corporate D2C webshops have seen almost 300 percent growth in sales since the lockdown took effect. Sales on Amazon increased even more. We are now seeing the emergence of a new digital landscape, not only as a communication contact point, but also for distribution. How much of it will go back to offline sales and how much of it will stay online? In which formats?

Consumer behavior has been validated to search for brands more directly when buying online but they also seem to care more about the welfare of local businesses. Many in the industry were unfortunately taken by surprise and had to quickly improve their Google ranking. It was also a wake-up call as to how carelessly product and company information had been handled in the past. Very few brands can explain who they are, what they do, and why they do it. Many questions remain unanswered; often there is no Social Media (SoMe) team – with Instagram, Twitter and Co. being the media of choice of the younger generations, the customers of the future.

The future online sales landscape will be a mix of online and omni retailers, marketplaces such as Amazon, SoMe stores and digital D2C web shops. Even before Covid-19, Amazon’s market share of all outdoor gear online sales in the U.S. was estimated to more than 50 percent. Now it’s even higher. In China, the world forerunner in online distribution, online sales are estimated to remain above 95 percent, with SoMe apps and marketplaces being the dominant channels and department stores almost wiped out (in China, platforms such as TMall or are referred to as marketplaces).

The European legacy of multi-brand retailing will certainly give online and omni retailers a stronger position, but the geographical and linguistic fragmentation combined with the forthcoming stricter EU data protection legislation in electronic communications makes the synergy efforts of pan-European distribution much more difficult than in the US. We are therefore likely to see big differences between countries, product categories, even brands. Nevertheless, sooner than later we must prepare for a “digital first” communication and distribution scenario.

So what should a digital strategy look like? Most executives in the outdoor industry are digital immigrants without the DNA, mindset and experience to take over digital distribution the way digital natives do. When sourcing, logistics, marketing and sales teams are set up for analog business models, a successful digital strategy is far from the same as switching to D2C-oriented distribution.

Digitally native competitors begin by building a community of followers on Instagram, inviting them to provide input and feedback on concepts and asking for advance purchases before ordering fabrics and manufacturing products. These “micro-brewery” business models are hard to scale and impossible to copy for established brands. The hard truth is that the additional D2C margin is usually quickly eroded by digital tools, agencies, SoMe marketing budgets, shipping and returns costs. In many ways, brand web shops are like brand flagship stores: Great for brand promotion and great toplines in months with new collections, but with little left over for the bottom line when all costs have been identified. From a business perspective, brand and retail cooperation models with new concepts such as drop-shipping and co-curated SoMe campaigns could be a more interesting path to explore.

Online retailing is about to enter its third phase. Competitiveness is no longer defined by “cheaper, faster, more.” Today’s consumers expect commitment to sustainability, product knowledge, information and service, and customer experience. Online retailers will need to invest in everything that makes for a great customer experience – also including physical “flagship/experience centers.” Not primarily to sell, but to build loyalty, image and relationships.

The new outdoor crowd

Corona isn’t all bad news. This summer, the only holiday option for many is to go outdoors. That means there are many people who need outdoor equipment! What do they need and where will they look for it? How can they learn about your existence? And will they come back to the outdoors to play after Covid-19?

Upgrading skills and tools

New digital tools can be frustrating, but also a chance to be more effective. We have already learned that B2B digital sales meetings reduce time and travel costs; AI, chat bots and automated marketing increase conversion rates and reduce response rates. But it’s hard to present new materials and colors over the screen. It is important to help buyers with product specifications, educational videos and product sales statistics. After all, orders are usually placed on the basis of what the buyer already knows. The nut to crack is how to sell new styles and innovations.

The shift in competence

With all these changes, what new skills are needed in your sales and marketing teams? Which ones are no longer needed? Which ones make sense inhouse vs. outsourced? Do digital experts want to work in analog corporate cultures where there is little or no cross-learning and limited personal development opportunities? If you can hire them, how long can you keep them?

The budget shift

Taking a step forward in the supply chain is a quick board decision, but a big budget move. Sending products (quickly and across borders, inside and outside the EU) to individual consumers, answering their questions 24/7 in real time, then handling customer service and all returns from thousands of consumers instead of hundreds of retailers or a handful of distributors is different ballgame. The same applies to marketing expenditure for Google, Facebook and Instagram, when campaign budgets have to be decided on a daily rather than an annual basis. Are you ready for this change in budgeting culture?

by Martin Kössler,,
Co-owner of EDM Publications and SOG founder,
Owner of the competence consultancy HuginBiz® and co-owner of the digital transformation consultancy Digital Crew Nordic.

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