Top Takeaways from Outdoor Retailer Snow Show 2019
The 2019 Outdoor Retailer Snow Show is in the books. If you missed any of the events or education or just feel like it went by in a blur, here’s a quick recap of the highlights and helpful takeaways.
As always, we got down to business before the show even started with the Industry Intelligence sessions on Day Zero. Up first and top-of-mind for brands and retailers of all sizes: Trade & Tariffs. Ever since the Trump administration announced in early 2018 that it would impose a series of retaliatory tariffs on imports—mostly from China, the industry has faced uncertainty. A panel that included Dino Dardano of Hestra Gloves, Patrick Fox of VF Corp., Russ Coburn of independent retailer JANS and Angela Hoffman of Farmers for Free Trade discussed the impacts the recent trade war with China has had on their businesses abilities to plan and react. A few of our top takeaways from the session:
- NAFTA is out. The USMCA is in. The revised trade deal between the U.S., Canada and Mexico was inked in late 2018, and it must now be ratified by the three participating governments. The U.S. Congress will take up USMCA in 2019.
- When it comes to tax code, sections 232 and 301 are the ones to watch. Sections 232 of the tax code affects steel and aluminum imports. Think: metal edges on skis, camping chairs, tent poles. Section 301 affects imports from China.
- Tariffs run deep. Patrick Fox explained, for example, that VF Corp sources and ships 500 million finished-good units to and from 1,000 suppliers across 50 countries globally. But those aren’t the only ones affected by tariffs. Each unit crosses a border at least once, and each input in each of those units crosses a border at least once, most incurring a tariff with each crossing. The exponential effect of tariffs when you consider all that traffic is inevitably higher prices for retailers and consumers.
- Diversify. Diversify. Diversify. Dino Pappas of Hestra Gloves, which is based in Sweden but has four factories (two in China, one in Vietnam and one in Hungary) highlighted the importance of keeping your product mix and your supply chain as nimble and diversified as possible so that you can shift manufacturing to other countries or change your product portfolio to avoid crippling tariffs.
- OIA has been on the front lines in D.C. working to mitigate the effects of tariffs on outdoor industry companies. Watch this recorded webinar to learn how your business can react strategically.
And consider joining us in April at Capitol Summit to tell your representatives in Congress why retaliatory tariffs threaten American businesses.
We kicked off day one of the show at the Kickoff Breakfast: A New Era of Collaboration, where we announced the Outdoor Business Climate Partnership with Snowsports Industries of America (SIA) and National Ski Areas Association (NSSA).
As always, OIA hosted lunch each day of the trade show to help provide extra context to the issues our members are discussing on the show floor. Wednesday’s lunch tackled the hot (no pun intended) topic of climate action. Specifically, emission reductions. Sustainable Business Innovation Manager Nikki Hodgson kicked off the session before inviting experts from Clif Bar and The North Face to share their learned best practices. Here are a few highlights:
- The topic of emissions reductions is like fruitcake: its dry, dense and tough to swallow. And it should be a part—not the entirety—of your sustainability strategy.
- In 2018, OIA conducted an industry-wide climate benchmarking survey and learned that 17 percent of small businesses, 17 percent of medium businesses and 42 percent of large businesses have set goals related to carbon reduction. That is a great start, and OIA wants to support outdoor companies wherever they are on their journey.
- Emissions are hard to see. Literally and figuratively. The majority of carbon emissions in the outdoor industry occur in what’s known as Scope 3, with materials production. This is the area with the least transparency and where you have the least leverage in your business operations. The Higg Index Materials Sourcing Index can help you make informed decisions about your material sourcing.
- If you are trying to get corporate or executive buy-in on a broad sustainability strategy from your suppliers and facilities, energy efficiency is a good place to start. Consider setting internal carbon pricing, i.e. putting a value on your GHG emissions to help establish shared goals.
- Carol Shu with The North Face explained that the company used the Higg Index to audit carbon emissions and found that 60 percent of the company’s impact was in its materials production and manufacturing. Carolina Leonhardt with Clif Bar noted that 25 percent of the world’s greenhouse gas emissions (GHGs) are from food production. Together, Shu and Leonhardt offered three strategies that their companies implemented and that others can tackle immediately to address emissions impacts.
- Shift your product production to prioritize a circular model that keep products in use as long as possible.
- Map your corporate sustainability goals to Science-Based Targets that can be reported to and verified by third-party agencies.
- Identify your levers (where the bulk of your emissions happen) and figure out how to pull them (through purchasing offsets or investing in renewable energy markets).
Thursday’s lunch was one of the most popular, underscoring our industry’s commitment to public land and water policy and conservation issues. Jon Goldin-Dubois of Western Resource Advocates opened the session by noting that water rights and conservation are increasingly important to voters in the Rocky Mountain West. More than two-thirds of voters say water rights are getting more unpredictable and 80 percent believe conservation dollars should go directly to water resources, which are the lifeblood of Western recreation and agricultural economies. The Center for Western Priorities tracked 22 races in the West and found that conservation and public lands were a top tier campaign issue for candidates up to the last week of the 2018 races. Outdoor Industry Association’s Executive Director Amy Roberts highlighted the success of our 2018 Vote the Outdoors campaign, which targeted and engaged voters around these issues in key elections. Sponsored by Business for Water, the lunch panel included insights from the pollsters behind the Center For Western Priorities 2019 Conservation in the West Poll. Here are the top takeaways:
- Westerners prioritize clean water and healthy wildlife over energy development by a 3:1 margin.
- Voters in the West view recent policies by the Trump administration as more bad than good in regard to national monuments reviews.
- The perception among Western voters that climate change is a serious problem has increased by 10 points.
- Seven in 10 Westerners identify as outdoorists, and six in 10 say the outdoor recreation economy is the future of the West.
- Western voters on both sides of the aisle support tax increases that support the protection of public lands and water resources.
On Friday, members of the Colorado Congressional delegation dropped by the Convention Center to promote the CORE Act—which Senator Michael Bennett (D-CO) and Congressman Joe Neguse (D-CO-2nd) have co-sponsored in their respective chambers—and to meet and talk with members of Outdoor Industry Association.
Senators Bennett and Cory Gardner (R-CO) and Congressman Neguse, toured the trade show floor, visiting with representatives from La Sportiva, Scarpa, Nite Ize, Access Fund and Smartwool. Up for discussion were the current trade war and tariff uncertainty, which footwear brands La Sportiva and Scarpa explained could have significant business implications.
Later in the day, the Congressmen met privately with members of OIA’s advisory councils for recreation policy and trade policy. Gardner discussed his support of a proposal to move the Bureau of Land Management to Colorado in order to put decision-makers closer to the land managers and citizens who are directly impacted by land and water policy. He also noted his position that “tariffs are a tax on American consumers.”
Bennett and Neguse explained their support of the CORE Act and the work they’ve been doing and will continue to do to get the bipartisan support it needs to pass, including and especially from their colleagues in the Colorado delegation, Gardner and Scott Tipton-R. Bennett noted a key element of gaining support will be endorsements from businesses that are affected by this bill. The Recreation Advisory Council committed to signing a letter of support for the CORE Act and getting signatures from member companies in Colorado. Bennett used that as an opportunity to urge companies to visit their members of Congress in D.C. “When OIA comes to Washington, [elected officials] get to hear directly not only from whose avocation depend on these public lands but whose vocations depend on them. Yes, they’re outdoorists and conservationists, but they’re business people…they’re capitalists.”
Outdoor Foundation hosted lunch on Thursday and invited a few key partners to join in a panel discussion about how our industry can support the future of outdoor participation by getting more kids and families—especially from underserved communities—outdoors. The panel included representatives from youth engagement organizations and foundations across the country, each with a unique perspective on why and how our industry can increase participation.
- Yessica Chavez, ambassador for Environmental Learning for Kids: “You can’t be who you can’t see.” Brands need to use their marketing efforts to better reflect the diversity of the outdoor community that currently exists and the diversity we hope to see in the future.
- Loretta Pineda, executive director of Environmental Learning for Kids: “Collaboration is key.” Nonprofits with small budgets can each only do so much. When like-minded groups in a community pool their resources and efforts, everyone achieves more and realizes a greater and longer-lasting impact.
- Lise Aangeenbrug, executive director of Outdoor Foundation: “Outdoor experiences have to be fostered over the long-term. One-time activities don’t create outdoorists. We’re not just producing participants, we’re producing leaders.” Our collective efforts need to be focused not only on the quantity of people we’re getting outside but the quality of experiences they’re having and the quality of future leaders we’re fostering through this work.
- Constance Beverly, executive director of Share Winter Foundation: We must immediately reject the notion that under-served kids aren’t worth investing in. “I can’t count the number of times I’ve been told, ‘but those kids will never be lifelong skiers or snowboarders, so I can’t justify marketing to them.’”
- Seth Ehrlich, executive director of SOS Outreach: “When you try to engage as many people as possible, you actually diminish your chance of success.” Don’t try to reach and impact everyone. Focus your efforts on a particular group where you have potential for maximum impact, then partner with other groups who are doing the same thing. Over the long-term, you’ll serve more people in a meaningful way.