At Outdoor Retailer Summer 2023, The Daily hosted an executive roundtable to hear from five industry leaders about how the COVID-19 pandemic shaped their business and where they think the industry is headed.
The five panelists were:
- Lesley Christoph, Marketing Director, Lowa Boots
- Thomas Laakso, Vice President of Product and Operations, DPS Skis
- Steve McGrath, Vice President of Marketing, Camp Chef
- Jedd Rose, President, Topo Designs
- Somer Webb, CFO, Solo Brands
The panelists spoke about inventory issues, softening demand, some silver linings that emerged, and how they managed to keep innovating through the pandemic.
Here’s a recap with takeaways from that session.
How Business Changed During the Pandemic
As restaurants and businesses closed, people were sent home and not working from offices.
Steve McGrath said Camp Chef saw a huge uptake of its home cooking and camp cooking products.
“Certainly people were getting outside more. They were going camping instead of going to Disney World,” he said. “A lot of people learned to cook. The Food Network took off. For us, it was an explosion of the brand.”
Jedd Rose said Topo Designs had to navigate where people were buying things, because Topo had its own retail stores, which suddenly closed down.
“Everybody just shifted to online, and we’ve primarily been fairly strong online, so we were able to adapt to that fairly well,” he said. “But it was a stressful time in terms of where our sales were coming from and what to do with brick and mortar.”
Topo is mostly known for its bags, but it also has a full apparel line. When people weren’t traveling as much the shoppers shifted from shopping for packs to buying more clothing, Rose said.
“The uncertainty was the hardest part to navigate,” he added.
For Solo Brands, CFO Somer Webb said her company was set up well for the online shopping focus of the pandemic.
“We were direct-to-consumer first,” she said. “It was primetime for us. We had a massive acceleration of customers coming online. We saw a surge.”
The main issue with that was demand outweighed supply, Webb added.
“It became how much supply can we get versus how much demand was going to be out there, because the demand was overwhelming,” she said. “And then you saw the flip.”
At Lowa Boots, Marketing Director Lesley Christoph said as primarily a wholesale provider with a small e-commerce component, the pandemic was an opportunity to find new efficiencies and learn to work more collaboratively as a team.
“There was a real bonding that happened within our company that still continues to this day,” she said. “I consider that a real plus.”
Pandemic Silver Linings
Along those lines, Topo used the pandemic to look at what was critically important for the company.
“You can get very comfortable with moving day-to-day and taking meetings and running a business and not looking super critically at what has to happen at every moment,” Rose said. “We’re actually better at looking more critically at what is crucial to our business now.”
The pandemic made Topo better at solving customers’ problems, he added.
McGrath saw the pandemic as a leveling of the playing field, where smaller companies could compete with the big brands with large stores.
“We all had a chance to go at these guys and really make a name for ourselves,” he said.
The pandemic helped to remind companies of the importance of contingency planning, Webb added.
“Everybody thought they had a contingency plan and then you realized you needed to take it up a notch,” she said.
To her, that meant dialing in sourcing and making sure the business could sustain a disruption in the business cycle to avoid missing out on consumer demand.
Thomas Laakso, vice president of product and operations at DPS Skis, mentioned that his company makes their skis locally, in Salt Lake City, and he thought that making their own products would help with the supply chain problem.
“But a pandemic was not in the risk management plan,” he said.
Laakso cautioned against knee-jerk reactions, neither willfully ignoring the reality of the situation nor making dramatic changes.
Current Inventory Situation
The inventory glut the industry is currently faced with is “something’s that’s real,” Laakso said. “But, and maybe it’s a bit optimistic, but I’m still thinking skiers will be skiers, and we’ve already started getting calls going, ‘actually we need product.’”
Dealers who didn’t place preorders are not likely to get product, according to Laakso.
“The hard lesson is don’t cancel your preorder,” he said. “That just hurts everybody.”
Christoph echoed those points, saying “hikers will be hikers,” and that Lowa is encouraging retailers to place small, fill-in orders and not “big, massive shifts. Just keep doing business. Pay attention. Sometimes it’s the small steps that are going to get you where you want to be.”
So far this year, Lowa is feeling good about business, particularly compared to last year, when the company didn’t have products to sell.
During the pandemic, retailers were begging for merchandise, McGrath said, “now we’ve got more product than we know what to do with.”
To help ease the difficulties between brands and retailers, he suggested focusing on relationships and treating them as partnerships.
“Being partners and understanding each other’s side of the business and sticking with the brands who supported you,” McGrath said.
From Topo’s perspective, Rose said last year there was uncertainty every day, and now business has more of a normal feel.
“It’s back to doing all the stuff you need to do as a brand,” he said. “Everybody’s very hungry. I’d say the competition in terms of brands right now is really, really strong.”
Rose sees that as a positive outcome, resulting in better brands, products, and a better industry.
But, he added, to compete a brand needs to be great at all channels, including digital and wholesale.
“You have to do all of it very well and really connect with a much more educated consumer,” Rose said.
Webb sees the industry through a financial lens, and said she likes to see inventory levels as low as possible.
“Because demand was so crazy, and the struggle to get supply was so great, we (collectively as an industry) lost discipline on inventory,” she said. “It got a little bit out of control.”
Webb added that people had said brick-and-mortar retail was dead, and now it’s the “new hot thing again.” That means Solo has been leaning on its retail relationships lately.
Based on their data analysis from retailers’ point of sale systems and from talking to consumers, McGrath of Camp Chef said demand has slowed because people are unsure of the future.
The market is still somewhat price sensitive, but they are seeing a trend of some customers who are coming back to their products and buying at a higher price point. Those customers are also well-educated on products, McGrath said, “they know what they want.”
Prior to the pandemic, McGrath added that some businesses were on autopilot, and “now we’re having to think more critically and understand what has happened over the last couple of years. We have to be smarter about what we’re doing.”
During the pandemic a lot of people found something they were going to be interested in for many years, Rose added. As a brand, Topo has been trying to figure out what those activities are. Right now, people are remembering how much they love to travel, he said.
“That’s taken off from the perspective of which products are selling the best for us,” Rose said. “But that’s going to drift back into normalcy at some point.”
If the economy falters even more, travel will probably be less desirable, and people will go back to doing those activities they explored during COVID, like camping, he added.
“Those are opportunities for the outdoor industry, even if they may not be at the same boom levels,” Rose said.
One lesson that Lowa was reminded of over the recent years was that there are things you can’t control, Christoph said.
“One of the things we can control is working on being a better, smarter company, and being more efficient,” she added. “Throwing out a lot of things that worked great for a really long time and don’t work anymore.”
The pandemic was a period of a “great deal of innovation” for Lowa, according to Christoph.
“We had traditionally been considered the mountaineering, backpacking, hiking boot company,” she said. “Then we looked at what was going on with the influx of people coming into this new arena. We’ve built brand new categories since then, brand new trail runners, for example, which just launched a month ago.”
Christoph added that the product might have launched earlier if not for the stops and starts at the company’s factories in Europe.
Having a strong brand perspective on social topics has been a crucial factor in Topo’s innovation, Rose said.
“Whether that’s sustainability or societal issues that are important to your customer base,” he added. “If you have a great social and environmental story around a great new product that’s going to be even more impactful for your consumer.”
Looking to the Future
In 2023 and beyond, the outdoor industry should benefit from consumers going back to traveling and valuing experiences, according to Webb.
“We’re in a different spot where consumers aren’t just buying goods, they’re buying goods that actually offer an experience,” Webb said. “That’s why consumers will continue to gravitate toward this industry.”
At DPS Skis, Laakso is watching the opportunities on the secondary market, looking for ways to bring in consumers at a lower price point.
“Maybe they don’t need it perfectly new,” he said.
Rose spoke about the necessity of listening to consumers about how they want to participate in the outdoors, rather than have the industry dictate what they’re going to do and how they’re going to do it.
“There’s not just one set of rules, one small club that we’re all part of,” he said. “That’s where I really see the opportunity in the outdoor industry.”
Bart Schaneman can be reached at firstname.lastname@example.org.