May 10, 2012

In Bid to Remain Relevant, Retailers Innovate on Multiple Fronts

The 2010s are emerging as a decade of unrivaled innovation by traditional brick-and-mortar retailers trying to keep pace with consumers who are accustomed to researching and buying products anytime and anywhere they like.

To keep up in today’s world, retailers must be ready to create a unique customer experience and provide what customers want, when they want it. Expectations have changed. The popularity of Amazon demonstrates that many consumers value ease, convenience and price over the traditional value proposition of product expertise and personalized service.

In the outdoor industry, specialty brick-and-mortar retailers must identify the business approach that works for the brand. For example, consider either a high-volume, low-margin model, which runs the risk of driving down prices and margins; or a low-volume, high-margin approach, which requires a commitment to customer service, product expertise and knowledge of local outdoor recreational opportunities.

In either case, retailers must be creative. It’s not easy to stand out from the crowd when your competition includes not just the store down the street, but every outdoor retailer with an online presence —regardless of geographic location.

“The outdoor specialty retailer model will have to evolve to include more technology, Internet presence and a real focus on the customer experience — not just good customer service — but the entire experience when a customer enters the brick-and-mortar’s door,” said Jennifer Mull, CEO of Backwoods, which operates nine stores in Texas, Oklahoma, Kansas, Missouri and Nebraska, as well as an online store and adventure travel business. “If their experience isn’t beyond what they can get online, there is no real reason to walk in the door. On the other hand, if you accomplish a terrific experience within the store, there are compelling reasons people will walk in.”

While the importance of any particular initiative will vary in any given market, the examples below show how some of the industry’s more successful retailers are innovating.

  • Smaller footprints: Some retailers are developing smaller footprint stores with tighter assortments. Cabela’s will open its first Outpost store this year in a bid to reach smaller markets (e.g., Idaho Falls and Casper, Wyo.; Missoula, Mont.) that cannot support destination stores, which can span 250,000 square feet. The center of each 40,000-square-foot Outpost store will be stocked with seasonal items that will change three to four times per year. The stores will also carry a higher percentage of Cabela’s branded products, which tend to sell better in smaller, more rural markets. On the East Coast, Eastern Mountain Sports (EMS) has dialed in separate formats for what it calls neighborhood, suburban/regional, urban, gateway and destination stores. Choosing the best model for each geographic location will enable EMS to tailor the retail experience and product assortment to each market’s unique characteristics.
  • Technology-enabled stores: Technology can make up the difference when inventory or salesperson knowledge falls short. Some retailers provide kiosks or equip salespeople with iPads or other mobile devices to provide access to full product lines or product information not available in the store. Cabela’s is upgrading its in-store kiosks, while EMS and Michigan-based Moosejaw have equipped store associates with iPads so they can scan QR codes and browse the Internet alongside customers in their stores. Such technology can also enable employees to complete sales transactions on the floor, or allow customers to go online to order an item the store doesn’t have in stock.
  • Localized assortments: After years of focusing on e-commerce operations, Moosejaw resumed its brick-and-mortar expansion this year. Using data from years of selling online, Moosejaw is identifying not only the best places to open stores, but how to stock them with the fastest turning SKUs. A 4,000-square-foot store in Boulder, Colo., for instance, will carry more climbing gear than the one they opened earlier in the year in Natick, Mass.
  • Tighter brand partnerships: In a bid to differentiate itself, Michigan-based Summit Sports videotapes interviews with brand executives, reps and athletes. The interviews, which focus on products, are posted to co-branded web pages and product pages on and YouTube. Some brands have liked the videos so much that they have posted them on their own sites. Summit Sports generally interviews executives from brands that have provided co-op advertising dollars for online campaigns used by its nine online stores, which also include, and
  • More customer engagement: To encourage participation and position itself as the go-to outdoor retailer in Knoxville, Tenn., River Sports Outfitters offers paddling trips and rental bikes, sponsors local events and operates a climbing gym next to its store. In the last year, the retailer has dramatically increased the number of events on its calendar in a bid to engage customers further, said owner Ed McAlister. In an eight-day stretch last month, River Sports brought its portable climbing wall to a local YMCA for an event that drew 1,000 kids. The next Monday, it cosponsored an 80-mile bike ride along the Tennessee River. The retailer scheduled a fundraiser involving kite flying on Tuesday night, followed by “SUP socials” Wednesday and Thursday, and a boat demo on Saturday, when store employees also helped host a Half Ironman event. McAlister’s countless hours promoting his city’s outdoor amenities were recognized earlier this year when River Sports won the concession to run the Outdoor Knoxville Adventure Center in a city park along the river. The result: River Sport has become synonymous with outdoor adventure in Knoxville.

Of course, none of these initiatives by itself is enough to ensure retail success. Yet, each can be used in combination with other tactics to help specialty dealers stand out.

“It’s like a package,” noted McAlister, who plans to launch a revamped online store this summer with real-time inventory and improved interfaces for iPad and smartphone users. “As long as you’ve got one or two things working well, you can succeed. Everything you do does not have to be a home run.”

For more tips on how to stay relevant, see related story.