Retail, Technology, Consolidation, and Unintended Consequences

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This morning, the Seattle Times featured this article telling us that REI wage hikes for store employee announced last summer will be costing the company $24 to $25 million.  The company’s net income for its last complete year was $38.3 million.

Meanwhile, my oldest son sent me this article from Investor’s Business Daily, telling us that fast food purveyor Wendy’s will have self-service ordering kiosks in 6,000 restaurants in the second half of this year due to rising minimum wages and tight labor conditions.

I’ve been writing about the potential impact of 3D printing and other kinds of manufacturing technology for a while.  Here’s my article on the apparel manufacturing system Intel plans to introduce.

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What Will Retail Be Like in Five Years and How Will You Prosper?

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That was the question asked at a meeting last week at the Agenda trade show.  The meeting was attended by various invited brands and retailers and by me.

This meeting has been going for maybe four shows now and has generally been thoughtful and productive.  That’s a welcome improvement from the larger group meetings that used to be held at ASR.  They tended to be a bit acrimonious and have limited value.  Except that I got a free breakfast.

I had to leave before the meeting ended for a dinner engagement and didn’t get a chance to put in my two cents worth.  But the topic keeps churning my brain.  Typically, that means I should write about it.

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The Impact of Demographics on the Active Outdoor Industry

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I’ve just finished reading a book called The Methuselah Effect, by Patrick Cox.  As I’ve said, I often get intriguing business ideas from non-business books.  This is one of those times.  I really recommend this book.  The trouble is, it doesn’t seem to be on Amazon, which I’ve never seen before.

Anyway, the book is about advances in biotechnology and how they are going to impact health and longevity.  The first chapter title is, “Fewer Births, Longer Lives: Society’s Aging Changes Everything.”

His premise, which I found convincing, is that people are going to live longer and be more active.  But there are going to be fewer people.  He goes on to says in the first page, “From here on out, every generation will be smaller than the one before it.  After 200,000 years of population growth, mankind’s numbers are shrinking.”

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The Wallons and Skate Longboards

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I want to talk about taking a long term perspective, unforeseen consequences, not learning from history and maybe confirmation bias.  A couple of things have serendipitously come across my desk as the same time that made me renew by thinking on these issues.  I seem to find my best business lessons everywhere but in business books.

As you may have read, the European Community has just spent 7 years negotiating a trade pact with Canada.  But it collapsed because the Wallons voted against it.  The Wallons represent the French speaking part of Belgium.  The other part speaks Dutch and each part has its own parliament.

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Growing Snowboard Brand Revenue; the Active Outdoor Market and Year Around Resorts

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There has been much ringing of hands and gnashing of teeth around the subject of snowboard participation and what to do about it.  Studies have been done and programs implemented.  What has their impact been?  Hard to know, because we don’t know what things would look like if they hadn’t happened.

SIA reports there were 17.1 million snowboard visits to U.S. resorts during the 2004-05 season.  That number was 14.5 million in the 2014-15 season, down 15.2% over that period.  Participation during this period peaked during the 2009-10 and 2010-11 seasons at 18.9 million.

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What Does Snowboarding Need? Perhaps the Wrong Question?

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I’ve almost shoveled my desk off after the always enjoyable SIA show in Denver. That shoveling process always includes reviewing the various catalogs and magazines I’ve picked up during trade show season and, as always, one of those was Transworld Business. I’d had it since Agenda, but hadn’t finished reading it.  I particularly liked Annie Fast’s article on personal progression in snowboarding.

It also had an article called “What Does Snowboarding Need?” which I stole for my title here.

Coming back from SIA, I find myself reflecting on how the industry has changed or, maybe more importantly, not changed. I’ve cautioned before on the dangers of being too incestuous as an industry and spending too much time talking to people we’ve known way too long and who are likely to validate what we already think.

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Sell the Experience, Not the Product: The Wavestorm Board

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I knew about this article on the Wavestorm $100 surfboard before it ever came out. In some ways, it’s old news. Less expensive surf boards of various constructions and materials have been popping up for years now, and the Wavestorm isn’t new. I guess the genie was out of the bottle around the time Clark Foam went bell y up.

So on the one hand it’s old news. It was highlighted on Boardistan, and I kind of decided there was nothing to discuss. But it kept popping back into my consciousness, and I couldn’t bring myself to delete the link to it. I even wrote 500 words at one point and trashed it.

But here I am. It’s Sunday morning and I think I’ve figured out what’s bothering me. That is, I finally know, from a business point of view, why I care.

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Kohl’s New Retail Experiment

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My family has a beach house on Long Beach Island, New Jersey.   I’ve been going there since I was a kid and still try to get back most summers. It’s where I learned to surf (I know- New Jersey surf? We work with what we’ve got).

Anyway, I was back there in September and as my wife and I headed back to the airport, Diane said, “Pull in there.” So I did. It was something called “Off Aisle” by Kohl’s and I gather this is their first store using this concept.

The store is a 30,000 square foot box with a cement floor. It’s filled mostly with racks on which apparel hangs, though they also offered some shoes, kitchen ware and bedding. Kind of like a Ross store.

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Terrain, Lifts, and Gravity: Advantages in Summer Activities; Thoughts on survival and what used to be the off season for winter resorts.

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Summer has been a hot topic in resort circles for years. I’ve run a couple of snowboard companies so understand what extreme, snow dependent, seasonality means. I’ve visited resorts, written about resorts, but never worked for one. SAM, I think, thought I was the right balance of insider and outsider for this assignment.

At the beginning, this was supposed to be a straight forward article on summer business. I started with the simple idea that summer provides welcome cash flow in the off season. I figured out pretty quickly that summer activities at winter resorts is no longer an isolated topic, but part of the broader (and changing) circumstances winter resorts are facing.

That is, summer operations should be considered as one of the factors that will affect resorts’ success in the future. For some, summer ops could provide a bit of off-season cash flow; for others, it could become a major revenue source. I think there’s a group that’s going to need it to survive.

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Trade Shows, My Mother, and Generational Cycles; Ideas About Your Customer

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Okay, I’m back from Agenda and Surf Expo. I feel bad I didn’t go to the Zumiez 100K event even though it’s not, exactly, a trade show.  I’ll make it to Denver for SIA, but am not going to OR, though I should. They wanted me to pay to get in, but in the best industry tradition, I found a company already attending that would get me a badge.

Still, I just decided there wasn’t time. I had some god awful viral infection that lasted from Christmas Eve to sometime at Agenda and I’ve got clients that won’t pay me unless I do some stuff for them.

Unfortunately, I’ve never found a client who will pay me for doing nothing. Oh well.

I made a presentation at Surf Expo, and will make a related one at SIA, that actually related my mother to generational cycles and am going to try my hardest to relate that to trade shows. I think I can do it by talking about what drives long term buying habits, something we should all be interested in.

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