Business news :Ski and Snowboard Dealers Urge Vendors to Address Overproduction

Noting that the industry is at a tipping point, the National Ski & Snowboard Retailers Association (NSSRA) board of directors urged vendors in an open letter to take rein in overproduction they say is destroying their brand equity and the specialty retail model.

In an open letter to the industry released at the SIA Snow Show last week, the board said the specialty retailer channel had lost 20 percent of the market to Internet channel, largely because consumers are opting to buy last year’s discounted models rather than pay full price.

A copy of the letter, signed by NSSRA Chairman of the Board, Hi-Tempo, follows:

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An Open Letter to the Snowsports Industry 

The meteoric growth in the Internet channel of distribution has led to the most significant shift in market share in the history of the specialty retail channel. In the past five years, the specialty channel has lost 20% of market share.

It could also be argued that this same Internet channel growth has been responsible for the largest loss of brand equity since the beginning of the industry. Vendors that have attempted to create a compelling brand story for their current inline product are fighting a losing battle because consumers can find last year’s version of that same product on the Internet discounted for 40-50% off. While we acknowledge that the retail space is changing and that ecommerce is an important part of that change, we think it is time for our industry to be intentional about how it can support consumers’ desire to shop in this space while at the same time being fair to all channels of distribution.

While it may seem melodramatic to some in the industry, specialty retailers and snowsports sales reps know that we are at the tipping point in the future of our industry.

The question is what are we going to do about it?

NSSRA has spent several months talking with retailers, reps and vendor managements. We’ve talked with retailers in other industries, and we’ve researched how brands from bicycle, motorcycle and watersport industries have taken the hard steps necessary to protect their brands and all their channels of distribution. This research has indicated that there are steps that could be taken by vendors and retailers to protect their brands and support all their distribution channels equally.

Step 1 -- Build to order. Vendors need to manufacture responsibly to minimize the over production of inventory. 

Step 2 -- Vendors should produce key price-point inventory in two-year product cycles. This would allow retailers to re-order product that would be current in the following season.

Step 3 -- It is not current model year product covered by current MAP’s that are devaluing brands. It is non-current product with expired MAP’s. As is happening in other industries, vendors need to adopt advertising policies that protect the integrity of their brands.

What will this change do?

• Rebuild the value of the brands that support and sustain our industry;
• Encourage vendors to protect their brands by managing their inventories in a responsible manner;
• Lead to a true partnership between vendors and all of their channels of distribution;
• Support specialty retailers in their efforts to grow their local snowsports markets;
• Allow all retailers – the retailers that support and build snowsports brands – the opportunity to compete with the rest of the industry on even terms; and
• Treat specialty and ecommerce retailers equally.

The current advertising policies of the snowsports world came of age at the very beginning of the ecommerce boom. At the beginning, no one was able to look through the lens of experience and have a sense of what the unintended consequences of a developing ecommerce channel might be. For better or worse, some industries, like books and music, were forever disrupted and will never be what they once were. Other industries were quick to see what impact ecommerce was having on their traditional channels of distribution and were quick to make the tough decisions to insure a sound future for their brands, their channels of distribution, and, most importantly, their customers.

The snowsports industry is at a fork in the road. One road leads to future growth, fair competition and even support for all channels of distribution. The other road leads to a disruption that will forever change the fortunes of brands, sales reps and specialty brick and mortar retailers, and will arguably ruin this industry that we all love so much. The managements that guide our industry’s most important brands will ultimately decide the future of our industry.

There are two hopes for the future of the snowsports industry. 

• That the leaders of our industry’s most important brands are able to make sound, intentional decisions to support all channels of the industry equally.
• That each and every retailer makes it their mission to share their views on the current state of the market with their vendors and are able to make the tough choices necessary to support the brands that choose to support all their channels equally.

Let’s all hope that our industry’s leaders are blessed with the wisdom to make the right decisions at this most important time.

--Brad Nelson, NSSRA Chairman of the Board, Hi-Tempo


( through SportsOneSource.com )