> "Does the fact that Cotswolds is now owned by a Belgian holding company or that Sports Soccer now own a high percentage of.....The choice is yours…"
>
> .....writes Rob Wilson of V12 Outdoor, in this opinion piece looking at the role of the ‘specialist’ climbing shop, offshore manufacturing, fat cat retailers, internet shopping and the price of outdoor gear.
In reply to Mick Ryan - UKClimbing.com:
You appear to be appraising your business and its market through a prism of idealism, not meant to offend.
The fact is that the larger, less specialist retailers tend to succeed because they appraise the market and make decisions in order to maximise their revenue and bottom line margin.
A different, but more quickly made (i.e. 5 minute, ok going on for 15 mins now) SWOT
Strengths
Staff - specialist shops are always going to have better staff who use the kit and can offer good advice.
Whether students working weekends or longer term full timers, these are the main asset of specialist shops
Customer loyalty. Although this does get hit by the price of gear, core customers will likely stick with a specialist retailer; however apart from a few these won't have endless pockets and needs.
If you are truly in business to make some money but not have to achieve a certain return on capital employed, then you have an advantage of being able and willing to withstand slumps in the market (assuming you can survive)
Weaknesses
Supply chain management - as stated difficult to maintain stock levels and variety; however, why should rock and run and others not pick non direct geographic competitors and jointly source goods. (remember big companies work for a reason)
Cash flow - although goods are paid for quickly and not on long credit terms, some even in cash but less and less) the working capital requirements of stocking a shop are I expect difficult to finance.
Where working capital is funded by debt, interest rate risk in the current climate will be putting the squeeze on margins.
Leasing costs - these are a fixed cost that will rise with the increase in costs for the owners if they have debt secured on them or are mortgaged.
Opportunities
Why should small specialists not work together? Joint ventures through joint procurement of stock and joint distribution may save money and the interests of specialists in different geographic areas should be aligned.
Merge - further than joint procurement - why not merge and gain the economies of scale of larger outfits while striving to maintain the specialist strengths - expertise and brand name.
Online presence. Any shop owner without an online selling presence is shooting themselves in the foot and reducing their possible market. If you have a shop and products and the shop isn't busy 24-7, which none are, then you have the time to take online orders and post them out.
Giving something extra online - if people come to your website because it has the best articles, links to weather forecast, new route and local area news they are likely, to be more likely to find the website and buy through it.
Work with local groups - whether it be a walking club or a university mountaineering club, by organising discount nights, competitions and social events you can
1) improve your turnover
2) become part of the local scene in a number of different groups
3) help improve the social scene around the groups in your area and
4) increase the opportunity of gaining experienced staff
Threats
New entrants - expanding empires like Cotswolds moving in to a new area would concern any specialist shop, but can be countered - see opportunities
exchange rates - yes it is cheaper to buy $ priced gear and wishing the pound weakens against the dollar isn't going to solve the problem, given the underlying problems in the US economy.
interest rates - already mentioned if you are leasing or mortgaged/highly geared and margins are low.
biggish business in the climbing world. Competitors who can raise more finance, bulk buy and take on prominent positions in towns are a threat as they will be able to squeeze margins and compete on price. These companies can also afford to make little money off the ambleside/hathersage branches because part of the idea is for them to build confidence and legitimacy in the brand.
local competition - there are a number of specialists. Maybe one reason rock and run is going online only is because it was a small shop in a difficult to stumble across location in a place saturated with gear shops where a large % of people go for the weekend do something and go home.
Conclusion
It's no good looking at the state of the market and moaning that corporate monkeys are taking over and it's all unfair.
You have to win customers and as always in business, because that is what you do, there will be winners and losers.
The way to win is to make the most of your opportunities while trying to mitigate your risks. Specialists have and will continue to survive in the market, and the ability to trade online helps the smaller geographically constrained specialists as well as the large retailers, although it must be remembered that here you are competing in a different market.
I do climb, appreciate specialist shops and want them to be around in the long term. I have not worked in the outdoor industry for a number of years and do not know enough to offer sound advice, I am not an expert - but thought I would offer some quick, not complete, thoughts.