Thoughts on the SIA Show in Denver- It Doesn’t Get Any Better Than This

Before my friends at SIA get too cocky over the title, they should know I’m referring to our industry’s current business environment as well as the show. Granted, I was a bit of a slow convert to the move from Vegas to Denver, and I still miss playing blackjack with friends, but overall I’m glad they made the move.

There were the usual opportunities to see friends I don’t see often enough, get some new perspective,  and see some great new product (and be mildly amused at some other new products that I’m guessing won’t be back next year). If the snowboard section continued to lead the way in sheer noise and excitement, the ski section wasn’t as far behind as it has been in the past. That ski/snowboard distinction ought to start (is starting, I think) going away.

I want to remind you all that no matter how good a job SIA does, it wouldn’t have been nearly as successful a show if, as an industry, we weren’t firing on all four cylinders. I’m saying four because there are four things that went right for us this season that I want to review.
The first, of course, is snow. Pretty much great in North America (with the exception being here in the Northwest where, unfortunately, I live). Europe got good early snow I’m told, though it tailed off after that. We all know that when it snows, we’re great managers.
The second thing was a consumer who, if still cautious, isn’t quite as scared to death as they have been the last year or two. The purse strings were a bit more open.
With apologies to some of the marketing types who want to believe they can influence consumer behavior more than I think they can, I would point out that those two factors are pretty much out of our control.
The next factor, which we can control to some extent as long as we invent something, is new technology. This season has seen the ascendance of all sorts of new rocker and camber technology, which aside from giving us something new to sell, makes it easier and more enjoyable to slide on snow. I don’t think we’ve had this kind of breakthrough in a while. It gives our customers a reason to buy, and may encourage them to replace existing equipment.
But I suppose we can’t expect, and perhaps wouldn’t even want, a big breakthrough every year. We need a couple of years to take advantage of those breakthroughs when they come along. So let’s characterize this cylinder as sort of controllable, but not reliably present every season.
And that leaves us with inventory levels, which are absolutely, positively, completely, and irrevocably under our control. Not so much as an industry. Let’s be realistic- a company’s management will control its inventory and distribution because they believe it’s the best thing for the company; not due to some altruistic concern for “the industry.”
A company can control its inventory. And apparently most of them did last year to the benefit of all of us. I wrote about the benefit of inventory control as it relates to conversion and participation at the show after SIA’s breakfast on that subject.
In the recent past, we haven’t always done quite so well at inventory control. Greed, misplaced competitive zeal, entrepreneurial ego, a misreading of market conditions and prospects or some combination of all of these has caused some companies to produce too much and try to sell it in the wrong places. This has had a negative impact, in some cases, on the whole industry.
Now, having been beat up by the recession, we all seem to have come to the conclusion that it’s really, really bad to have left over inventory in a one season business. Maybe we’ve even figured out that losing a few sales and creating a little product scarcity is way better than having to dump a bunch of stuff at the end of the season or carry it over to the next. The best companies have even crunched the numbers around some lost sales, leaner inventories and better, higher margin sell through and have figured out that, depending on company specifics, they are better off on the bottom line and on their balance sheet in spite of leaving some sales on the table.
But fear fades and greed is eternal. I don’t expect anybody to “take one for the industry,” in planning their growth and managing their inventory. But I do think it will be in all of our interests if, as individual companies, we recognize there are both short and long term benefits to constraining growth and product supply just a bit in the interest of the bottom line.
That way, the next time we aren’t firing on all four cylinders, we’ll just have to change the spark plug wires, not rebuild the engine.