New Normal Consulting | A View From Within The Microscope
15838
post-template-default,single,single-post,postid-15838,single-format-standard,qode-quick-links-1.0,ajax_fade,page_not_loaded,,footer_responsive_adv,qode-content-sidebar-responsive,transparent_content,columns-4,qode-child-theme-ver-1.0.0,qode-theme-ver-11.0,qode-theme-bridge,wpb-js-composer js-comp-ver-5.1,vc_responsive

A View From Within The Microscope

Katie Schultz Dew Drops photo

A View From Within The Microscope

For the past couple decades, an ongoing experiment in consumer behavior has been unfolding before my eyes. My wife and daughters – and for that matter my son, as well – are targeted consumers in several key demographics. Long ago, I learned to watch them without commenting on their choices, and then to circle back and ask questions about the decisions they made about buying stuff at retail. It’s been fascinating, and informative.

Here are their stats: My wife is an active and fit professional woman who buys for herself, her kids, and – I have to admit it – for me as well. (She controls the purse-strings, for sure.) She’s a high-end rock climber, a frequent runner, and she’s skied 100+ days a winter many times. My eldest daughter is 21, and she’s a backpacker, skier, climber and urban dwelling student and full-time medical assistant. My second daughter is 13, and she is spending her own money (earned from baby-sitting) for the first time, and she’s a sporty and outdoor girl, too. My son is almost 12, and he likes playing football and being outside, climbing, skiing, and he wants to be a hunter.

Each of them love brands. They key in on major manufacturers in the sport and outdoor space, and also where there’s crossover in fashion and in natural products for health and grooming. They like brands such as Patagonia, The North Face, Jansport, Adidas, Under Armour, Lululemon, Lush, Nike, and Vans. They follow the Packers, the Badgers, the Chargers, and The Wild. They’re rabid for small brands such as Organic and So iLL. They are all up on the latest music, and watch all of the latest movies. If it’s something about an Avenger, someone named Bourne, or the recent cutting-edge hip-hop artist, all four of them know about it and have already told each other and all of their friends. My second daughter updates me on the celebrity news – who’s dating whom, who’s breaking up, and who’s rising or falling – on what seems like a daily basis. Her older sister texts me about politics, and the younger brother knows everything there is to know about any NFL team. They buy media, games, apps, tech, clothing, and lifestyle products – at this point – almost interchangeably.

As a professional observer of consumer retail behavior, I couldn’t ask for a better microcosm. It’s like living in the microscope. My job is to observe but not to influence the behavior. It’s fascinating.

That’s not to say that I don’t set the tone, or help to define the values. We shop local. We belong to a community CSA, and frequent the farmer’s markets. We know where our food comes from, and we choose to buy our gear and clothing where we can where it makes a difference in our community.

But it’s getting to be more difficult. In our home town – as in the rest of the country – the retail landscape is changing. So too are our behaviors. This year’s Christmas shopping underscored how much things have changed.

My wife and I have made a practice of doing as much of our Christmas shopping as we can locally. There’s a mall where we live that – for most of our years shopping there – has been anchored by a national department store but almost every other retailer has been local. There we could buy toys, clothing, footwear, household goods, and even groceries for our Christmas dinner at stores that were not only local, but also owned by people we know in the community.

So it was interesting to me this year as we made our rounds with our Christmas lists at this same mall where we have been shopping for almost two decades. Years ago, we found out that we couldn’t buy consumer electronics or branded toys such as Legos or Marvel there. Within the last decade, a Target store has been built adjacent to the mall, so by default we always finish up there for these sorts of goods. Otherwise, we filled our baskets and our van with items from this mall. It was different this year.

Recently, the mall changed format. It literally turned from an indoor shopping mall to an outdoor walking mall. In the change, many of our favorite local stores remained, and all the restaurants are still local. But they added capacity when they remodeled, so these doors have been filled with national brands. We now have Sur La Table, Lululemon, The North Face, Anthologie, and a host of other stores in addition to many of our favorite local shops.

Our kids have long known that this is where we shop, so their Christmas lists are made from their own scouting excursions to the same mall. As the mall has added national brand names, national brand names now appear on their Christmas lists. (Well, in addition to Legos and Marvel and XBox and Nintendo that’s always been there…)

My wife of course takes it in stride. She’s a consumer, and while shop-local is a value it’s more important to her to fill the list as it is. So we made our rounds through the mall this year, as every year, stopping at the new national stores as well as the old local ones.

Sales happen when the opportunity to purchase meets with the decision to purchase. Thanks to our smartphones, this can now happen at any time of the day or night. Here’s what I noticed my wife doing when we were at national chains: She found the item she wanted in the store, and several times the size or color was off. At least once, the gift was large enough that she didn’t want to carry it. So she simply signed on and ordered it right there, with overnight shipping. “I don’t even have to carry it,” she said. Many times, the gift also arrived at our house wrapped. When we were in local stores, she didn’t do this. “I want to support these guys,” she said. But primarily this is how she shopped when she was in a national chain.

Showrooming such as what my wife does is here to stay, and so are national chains. The question becomes how it’s used, and how we in the specialty channel can adapt in this market. We spend a lot of time looking at this very issue, and believe it’s a good opportunity for local retailers to do a few things: We envision a time not far from now where inventories are reduced, turn is increased, and products are sold primarily at full margin. There are a few things that have to happen to get there, but with virtual inventory and fractional (shared) margins, it’s not only possible, it makes a lot of sense.

One of our clients – Ibex – has already taken steps down this road for their specialty dealers. When products are sold direct within a market region, they split the margin with the local dealers. That’s a good first step. Brands should also look into fulfilling specialty orders directly from their brand shops. This way, everyone in a given market can carry less inventory and make more sales with less direct competition from the major brands.

Specialty retailers need to step up as well. We know from research that many are using antiquated or otherwise limited POS systems. POS providers are moving towards offering virtual inventory, and in other markets – most notably in the cycling market – it’s already there. Specialty bike shops can pull inventory of items that they don’t own or stock directly from major brands such as Trek or Shimano. They can fulfill for a customer from right there in their store, selling something at full price that they’ve never inventoried. Other specialty retailers need to get on board with similar systems, and brands need to support this as well.

We often look at the collision zones, and the most pressing one for all of us right now is that we all exist now in that space between a brand and a consumer. We think of omni-channel in terms of the channel – brick and mortar, online, direct – but consumers like my wife (and let’s face it, most consumers are like my wife now) view purchasing more as a continuum, a sphere that surrounds them, if you will. She can reach out into the ether – anywhere within that sphere of awareness and connection – at any time from any place and access what she wants. Specialty retailers need to insert themselves into this sphere, and brands and distributors need to meet them more than halfway.

It’s coming. Make sure you’re ready for it. And ask for it to happen sooner.


Many thanks to Katie Schultz for the one-time use of her copyrighted image. Learn more about the photographers who graciously provide us with images to use on this website by going to Meet Our Photographers

Brad Werntz
Follow Us

Brad Werntz

For over thirty years, Brad Werntz has been exclusively employed in the outdoor industry: As a guide and outfitter, a writer and speaker, as specialty retail staff and management, a marketer, and entrepreneur. For twenty-two years PEMBAserves – the sales agency that Brad founded – represented high-end brands to the outdoor industry’s most respected and influential retailers. Brad also founded Boulders Climbing Gym in Madison, Wisconsin and has been its managing member since 1996. Brad is an early-adopter and an innovator who has consistently asked and answered the question: “How is this going to end up?” To Brad, this question is as much about predicting an outcome as it is about influencing it. Brad is very active in the Outdoor Industry Association, and is currently on its Recreational Advisory Council. Brad has served on other environmental, and outdoor industry boards. Brad is the founder and board president of the Wisconsin Business Alliance.
Brad Werntz
Follow Us
Brad Werntz
brad@newnormalconsulting.com

For over thirty years, Brad Werntz has been exclusively employed in the outdoor industry: As a guide and outfitter, a writer and speaker, as specialty retail staff and management, a marketer, and entrepreneur. For twenty-two years PEMBAserves – the sales agency that Brad founded – represented high-end brands to the outdoor industry’s most respected and influential retailers. Brad also founded Boulders Climbing Gym in Madison, Wisconsin and has been its managing member since 1996. Brad is an early-adopter and an innovator who has consistently asked and answered the question: “How is this going to end up?” To Brad, this question is as much about predicting an outcome as it is about influencing it. Brad is very active in the Outdoor Industry Association, and is currently on its Recreational Advisory Council. Brad has served on other environmental, and outdoor industry boards. Brad is the founder and board president of the Wisconsin Business Alliance.

No Comments

Sorry, the comment form is closed at this time.