The mood at the Outdoor Retailer Winter Market that just wrapped up in Salt Lake City was subdued. Though the industry this past season wasn't as sluggish as in 2011-12, nonetheless the ratio of exhibitors to visitors at the show was less than desirable, and our colleagues at SGI America noted that their unofficial “dog index” – where more dogs on the exhibition floor means more prosperity in specialty stores – was down.
The big issue in the winter outdoor industry is the weather. That can't be controlled, but to lessen the effects of a poor season, more retailers are giving less space to outdoor winter products, replacing them with more transitional and lifestyle gear.
Traditionally, retailers have had to take a risk up front, ordering outerwear and winter sports equipment that has one inventory turn every year. To limit this risk, they're ordering fewer of these products. SGI opines that they're going to have to figure out how to take on more risk in order to keep from losing floor space, but notes that they're in a good place to take on more risk, thanks to the major brands' direct-to-consumer channel, an extra outlet for that increased risk. SGI calls it “a safety valve that can release excess inventory pressure.”
Outlets are another place that retailers can mitigate their inventory risk. Retailers and vendors are going to have to work to split the risk more evenly regarding front-end inventory. SGI notes that in bad years, this lets everyone share the pain, but on the downside, in good years, the benefit isn't as great. SGI expects a drop of 5 to 10 percent in sales for the industry for the winter season just ending. (That compares with a decrease of 10-15 percent for 2011-12.)
As retailers turn more toward lifestyle apparel, it may not be as disastrous for the industry as it sounds. More and more major brands are coming up with performance textiles designed into stylish clothes. Some of the specialty outdoor stores that spoke with SGI said they with these new innovations, they were looking to back away from strictly lifestyle and lean more toward hard-core brands.
The weather had a big impact on the most recent winter season to the extent that it didn't get really cold early enough for people to rush to stores for winter outdoor products during the holiday shopping season. In addition, SGI notes that the “Black Friday” sales – the biggest shopping day in the U.S., the day after Thanksgiving, when the Christmas sales begin in earnest – held by big-box stores selling electronics and toys take everyone's money before they have a change to think about sporting goods and apparel. Outdoor retailers might have to consider following suit with highly promoted, big-markdown sales on that day.
Despite the industry's uncertainty and hesitancy to go whole-hog, SGI notes that one sector that seems to be booming is environmentally friendly technology for cooking, cell phone charging and other tasks. It cites MagicCook as an example. It uses a chemical packet to heat food – no fire needed, a particularly good idea in areas affected by drought – and can boil water in 10 to 15 minutes.