Product Line Size; The Impact on the Way We Do Business

It began, I suppose, a couple of months ago when somebody at Burton sent me their complete catalog, buying book, whatever you want to call it, including prices and terms. Damn near five pounds it weighs according to my handy, dandy bathroom scale including colorful blue binder. It contains all of the Burton Company’s brands and certain product for international distribution that won’t be seen in the States, so sure it’s big.

Ride’s catalog isn’t as big by weight, but it comes with two CDs full of product images and photos.
Well, you get the picture. Big product lines and lots of information to digest. I wouldn’t be surprised if there were more products to choose among than when there were 250 snowboard companies.
Big product lines aren’t new, and at least for the larger brands, no retailer buys everything the brand offers. But what struck me like a blinding bolt of the probably obvious is how much the business of snowboarding has had to change just because the product lines have become so large. Over the last eight or ten years in snowboarding we’ve studied changing competitive conditions, discussed diversification as a way of overcoming seasonality, the impact of foreign production, the role of chains, and “fixing” the buy sell cycle. I’ve been in the middle of some of those conversations.
Imagine my chagrin when I considered the possibility that a simple thing like the increased size of product lines may have been as or more important to industry evolution than the other apparently more important and more complex business factors we’ve taken so much time and energy to discuss and try to manage.
There is the chicken/egg factor to consider. I’m arguing that certain industry changes happened because of the increased size of product lines. You might also argue that product line increases were largely a response to the other changes mentioned above. I’ve previously suggested that to some extent increases in the size of product lines were a response to what competitors were doing rather than an attempt to meet identified customer needs. To the extent that is true, I am comfortable suggesting that large product lines have changed the way the industry functions.
Where are these changes? In general, the process of getting a specific order takes more preparation, a more cooperative and business oriented relationship between the company’s rep and the retailer, and more time if only because there are more factors to consider. Specifically, the role of trade shows, the selling process, and the reps function and relationship with the shop are all different. Let’s see how.
Trade Shows
How long, exactly, do you think it would take one of the major brands to present its whole product line to a retailer? Three hours? A day? After that presentation, assuming you can still hold your head up, how much do you think you’d remember? How long would it take to figure out your order and get it written? No retailer should be allowed into a product presentation meeting without first chugging two Red Bulls and presenting a notarized affidavit that they got a good night’s sleep.
For many brands it’s difficult at best (Impossible for most brands in my opinion) to show what they need to show to all the retailers they need to show it to, at Vegas alone. Mervin Sales Manager Greg Hughes says that the SIA show has become more important for them because it’s a preview show. “But we have a hard time showing all our product to all the retailers who want to see it at the show, and we’re smaller than a lot of other guys.”
If you think about the sheer time commitment, and logistics of getting an order together from a major brand it’s pretty clear why SIA adopted the “See it, try it, buy it” approach for the buy sell cycle and why Vegas is more “See it” than “Buy it.” If you do complete your buy there, it’s likely that a lot of preparation went into it before the show.
Burton National Sales Manager Clark Grundlach says Vegas is not about writing orders any more. “It’s an opportunity for dealers to review previous decisions and maybe see some late stuff. Sixty percent of our dealers will have seen the line before Vegas. We can’t show the line any other way given its size. The six weeks between Vegas and when everything has to be wrapped up just isn’t enough time.”
Clark didn’t say, but I’ll bet sixty percent of dealers means north of eighty percent of total sales.
The regional shows seem to be either more or less important, depending on who you are. For Burton, with eighteen territories and its own showrooms, the regional shows are a good place to sell accessories and to see some smaller dealers who didn’t get to Vegas. According to Mervin’s Hughes, on the other hand, “Mervin gets a lot of solid orders at the regionals. We can show our whole line there.”
Rossignol Marketing Manager Christine McConnell sees it a lot like Hughes. “They see it in Vegas, and buy it at the regional shows,” she says, but notes that around forty percent of accounts have seen at least some product before Vegas.
Selling Process
Remember the days when your whole product line (nine decks, one binding and some ts and hats) fit on a trifold? Assuming the retailer had decided to carry your brand, you could show the line and get the order in about twenty minutes. Then you both just had to pray the stuff actually showed up somewhere near when promised and that the quality wasn’t too bad. Some of you are smiling as you read that, remembering a very different snowboard industry. Some of you (your loss I’d say) don’t know what I’m talking about. God, it was more fun then.
Sales meetings tend to be in early to mid December now. Especially with soft goods, which typically have to be delivered before hard goods, an early start and on time delivery is more critical than ever. Limited showing of product lines seems to take place in December. According to Rossignol’s McConnell, smaller retailers have their hands full trying to sell everybody’s current product. “The reps have their samples in December and are ready to go, but don’t really start showing product until January. They don’t want to get in the retailer’s way.”
For chains and large accounts, where the selling and buying isn’t done by the same person, I suppose you can do a December presentation without disrupting the selling process. Still, if I were a retailer, big or small, I’d like to know what my sell through was like before I talked about new buys. And that doesn’t happen until the holidays are over, at least in hard goods.
Role of the Rep
More and more, it seems to be the rep’s role to consult with and recommend to shops what product they should carry. Armed with a lot more detailed information then they use to have on last year’s purchases, sell through and the retailer, they can and often do propose a buy for the customer that fits their size, open to buy dollars, and customers.
Mervin’s Hughes put it this way. “Good reps suggest what to buy. They know the shop, and they know what’s going to be highlighted in ads and videos, and that drives sales.”
In hard goods, I suspect retailers, especially smaller ones, are inclined to listen to a well-prepared rep. These days, all hard goods are highly functional. Brand choices are a lot fewer than they use to be, and brand switching, as a result, less common. Hell, what are you going to switch to that’s going to make any difference?
A decline in product differentiation from brand to brand means the reps can be an important competitive tool in placing product with a retailer. The quality of the business relationship between the rep and the shop buyer may have a lot to do with the brand’s success in the shop. Rossignol’s McConnell puts it succinctly: “Between the rep and buyer, they know what’s up in the shop. Their combined efforts go a long way towards insuring the right purchasing strategy.”
This relationship helps the process of getting the order together. There should be broad, early agreement on what parts of a large line are or are not appropriate for a given retailer. In some cases, the brand simply isn’t prepared to sell certain product to a retailer. The retailer’s size and open to buy for the brand may also dictate where to focus the buy in a product line they can’t possibly carry all of.
Finally, the rate of change in snowboard product simply isn’t as great as it use to be, and that takes some of the angst out of trying to pick the “right” product and reduces the difficulty of working through a huge line. Inertia can be seductive, though dangerous.
I suppose the possible downside for the brand comes at the end of the season if the rep recommended product didn’t sell through which, at the end of the day, is what it’s all about. “Hey, your rep told me to buy this stuff, which is still sitting here, and you’re pushing me to pay this bill?! Back off.” I’ll bet that conversation is the basis for a deal or two in the annual snowboard industry rite of spring- settling accounts.