Jim Spring’s retail audit shows that ski retail business has contracted about 3.7 percent overall to an even $2 billion. It’s a sobering thought that the entire annual gross for the ski retail trade is less than IBM’s net profit for a single quarter. Maybe it’s time for retrenching and a handy place to start is with fewer trade shows.
When K2 and Elan chose not to attend the SIA Snow Show at Solitude, Utah, in February, it was the first in what will prove to be a major series of defections from the trade show parade. The major retail buying groups didn’t go to Salt Lake, either—they set up their own meetings in Colorado Springs. Rossignol now says they’ll pull out of a number of major shows and put the money saved into consumer marketing. The company underscored its determination by taking a much smaller booth—about 30 percent smaller—at the Las Vegas show in March.
If the new SIA board decides to retreat from the Salt Lake show, the Outdoor Retailers Show—which runs concurrently—may try to pull in some of the ski companies. But those with a sense of fiscal discipline will resist.
Suppliers with any sense figure the reversal is long overdue. Snow-sliding trade shows have been proliferating ever since the first on-snow show at Telemark, Wisc., two decades ago. The larger hardgoods wholesalers currently have a calendar that looks like this:
- December and January: dealer intros and sales meetings (which are usually held in the Rockies).
- February: on-snow trade shows in New England, Colorado, Utah and California; buying group shows in Denver.
- March: Las Vegas SIA show, then rep shows in all parts of the country.
- April: Final rep shows; season-end parties for retail employees
In addition, the big companies spend tens of thousands on press intros. The sell-in season lasts five months, compared to a full-retail sell-through season of three months (October through December) if you’re lucky.
It’s madness. A van driver could easily do 20,000 miles a year just moving the samples between meeting halls. One million dollars is a round number that would probably cover the trade fair budget for a major supplier. The average ski or boot brand does less than $10 million gross volume in the U.S. market, so the traveling circus budget is a significant cost. Cut it by even 20 percent and you have a nice piece of change to drop into the consumer marketing budget or to send to the bottom line.
Why didn’t this occur to anyone five years ago, or ten?
It did, of course. But until recently, the industry was too fragmented and no single company could afford to invest in market expansion as a road to growth. Since about 1972, when the first oil embargo halted the heady skier growth of the 60s, the goal for every wholesaler has been to steal market share. The scramble for rack space meant that a disproportionate chunk of the marketing budget went to buttering up retail buyers.
Now consolidation has proceeded to a point at which the major players—Rossignol/Dynastar, Salomon, K2/Olin, Elan, Head, Atomic, Volant—have to concede that more market share growth is too expensive. For several years, companies such as Atomic, K2 or Rossignol could count on snowboard and skate products to drive growth, but now those markets have peaked. Salomon can count on growth from its hiking boot and TaylorMade investments, but that’s about the only bright spot on the hardgoods scene.
Any hope for future growth is going to have to come through finding new skiers or through convincing existing skiers to ski more often. This probably means marketing outside traditional channels. Historically, however, the ski business has found general-audience advertising far too wasteful. It’s going to take some out-of-the-box thinking to get sales moving upwards again.
The final straw for the hardgoods folks was the flat response to the introduction of shaped skis. Only a troglodyte would still argue that shapes are anything but a better mousetrap, and if the story had been marketed intelligently to consumers, you’d have expected to see a well-trod path to retail doors. Instead, we see sales off 3.7 percent in a year with a healthy economy and great snow conditions. In an open letter to the industry, marketing veteran John Douglas of Rossignol damned his industry peers for funneling the entire shaped-ski message into ski shops, where it ultimately dissipated.
It may be that the skier population has been made cynical by two decades of marketing hype about strapless poles, Parablacks, external dampers, open-throat boots, Derbies, rear-entries and caps. It may be that most skiers can no longer discriminate between genuine game-improvement technology and monkey dust. It may be that the $79 price tags hanging on the world’s oversupply of straight skis have permanently devalued the really excellent stock of shaped skis sitting in retail inventory at $299 and up.
It would be nice to see the hardgoods folks market more consistently to the end user. That would certainly be good news for smaller resorts, which would benefit from any incremental increase in skier visits. And it’s certainly time for smart guerrilla marketers to talk to the hardgoods guys about joint promotional opportunities. With fewer trade shows on the schedule, smart resort managers ought to at least to talk suppliers into sending the vans around for more consumer demos.
Seth Masia estimates he’s walked more than 600 miles in the Las Vegas Convention Center over the years. He can be reached by e-mail at: [email protected]
