Some great posts!
Dawgcatching, Matt, and Faber, all great points.
Dawgcatching, as a B&M owner and an internet retailer, has a great point of view and understands his strengths and weaknesses. The "great product, great service, or great price - pick two" approach successfully classifies 90% of customers who would walk through his door.
As everyone is discussing, the reality of being in business today is competing with online merchants, whose operating costs are usually far lower, and sometimes, whose buying power can allow additional discounting that B&M stores can't match. This is, of course, speaking generally, and isn't meant to be industry-specific.
We live in America, it's capitalism people, and the market forces apply. There isn't any reason that people shouldn't seek the best price possible in our economy with all of the access to different purchase points. The issue comes with what level of expectation people attach to these extremely low-margin purchases, what knowledge they have about the prodcut itself, and what kind of service they're getting.
If I know what product I need, or at least have narrowed it down to a few choices and I don't need the service of a B&M, why should I buy from one? Just to be nice? Just to lose some of my well-earned money?
Ski shops balance selling lower margin hardgoods that have associated distribution costs with being in the apparel industry, where profit is higher. In a sense, it's a split business, even though for the customer, the purchases are often joined.
For retail outlets who compete with online merchants but offer necessary in-store services (ski shop binding mounting/adjustments/waxing or bike shop component installation/tune-ups/etc...), they can adjust these service prices accordingly. I don't have a problem paying $10 or $15 more for services attached to hardgoods "bindings I purchased elsewhere" when many B&M stores lose lots of sales to online brokers. Bike shops should adopt this method and charge $200 instead of $180 for a complete build. I'd pay it, and with the money saved from buying $1800 worth of bike online that would've sold for $3000 in-store, be happy throwing a bit of change the local guy's way.
The bitter attitude of business owners due to loss of sales because of the inability to compete is not my problem. It's theirs. They should develop a new business plan relevant to today's world instead of throwing in the towel. Yes, it's costly, it's extremely time-consuming, but The BOTTOM LINE of business is to MAKE MONEY, lots of people like to dance around the topic - if owners didn't make money, they wouldn't be in it. If you can't compete on price, you're doing something wrong, you're in the wrong industry, or you should look elsewhere.
People like Dawgcatching in a low-markup industry like skis do well (enough) because they provide additional incentives to buy from them while remaining as competitive as possible on price.
The future is B&M stores all on the internet and competing with themselves at the virtual AND local levels while understanding the utility of their product. If your product can essentially be bought anywhere, it's relatively low utility, and your ability as a seller of that product is diminished by that fact. The company I used to work for is private, online-only, worth $3-4 billion, and strives to find high-utility, high-cost products that others don't carry. If you're the only Stockli dealer around, build your business around the brand.
It's not hard to set up a website, and while it requires initial investment and a vast change of a B&M's business model, it's will become more and more required as time marches on. It's too easy to look elsewhere.
As far as my buying experience, all of the ski and bike shops I have bought from offer local and online purchases - Basin Ski, Peak Performance, and Aspen East in Vermont, Colorado Ski and Golf (a member of the www.geardirect.com
consortium) in Denver, and Woodland Sports (www.skidealer.com
) in Los Angeles, CambriaBike www.cambriabike.com
, and Superblow (www.supergo.com
, now Performance/Nashbar).They have learned to balance the reality of a local and an online market with great aplomb. Supergo, for one, started as one small store in the late '70's. The owner was savvy enough to start his own line of bikes taking advantage of low overseas costs, built his business around his own brand, and expanded relatively aggressively but into strong local markets. He sold to JP Morgan for $60 million in 2001, not even 30 years later. His children attended IvyLeage institutions. He chose price and product - Supergo isn't known for service - but this was something people would accept either in-store and definitely on the successful website. Other retailers can provide all three. B&M and internet sales can be done, and successfully.
B&M stores will always have the advantage and opportunity of offering SERVICE when it's attached to necessary goods (boots, clothing fit?) and through this valued interaction, at least have the opportunity to increase sales in other areas (higher-priced but lower margin goods like skis or bikes). And, as a tangent, two complaints you see/hear about all over the place that I'm sick and tired of:
1) * My service experience at my B&M was horrible * OWNERS, stop hiring teenagers who aren't knowledgable. You probably have a choice, and you're blowing you opportunity at driving sales and getting new customers. Additionally, every employee needs to be sat down, made sure of his/her product expertise even if they haven't used everything on the floor, professionalism in dealing with the customer, and ability to close the sale when the opportunity presents itself. Stop nickel and diming your customers. If a customer asks, "can you throw in a waterbottle if I buy this from you," say yes. Rarely will they launch into "can you swap out my crankset/seatpost/handlebar for the newest carbon fiber wunderkind as well?" Www.helenscycles.com
taught me this in high schools at my first job, and they are now a successful regional business in the bike industry. They have built their business around Cannondale, and you see their jerseys and store-specific Cannondale paint schemes all over Southern California. CONSUMERS, stop shopping at large chain sporting goods stores for products that require more sales knowledge than looking on the outside of the box and expect appropriate service.
This last point naturally brings up a quick discussion of what pricing is or isn't acceptable when not accompanied by service. Is 10% difference enough? How about 20%? Would you buy $850 skis for $350 if you "weren't quite sure" from a mass merchant or go in to B&M and pay $400, all but ensuring continued service in the future. How about $20 instead of $15 to a mom and pop bookstore who will order you something they don't have at the top of a hat...The medium I am proposing that ski retailers have to move into is also the source of their demise. Dawgcatching, unforutnately, can offer lots of information on this forum, but not close the sale (just a side-thought).
2) * I work in retail and I hate my life, have to deal with bitchy, uninformed, price-only customers * It is your choice in this country to work where you do - you balance the freedom of working in an industry you love, possibly in a part of the country/ski mountain you love, getting discounts on the gear you like, having more free time to take advantage of that gear than people who work in salaried positions, and to live less stressfully with not making much money. It's your life decision and no one forces you to work at a low-paying job (unless you are 15). You make your future. If you don't like the present, change it, but realize this change is often incremental. I'm not trying to preach (I'm a student again).
* * *
Until B&M's can find a way to either differentiate themselves enough in the market, get online, or remain in some other way competitive, they will be toughing it out in an industry linked to one season of the year. If you aren't using all of the sales channels possible, as a business owner, there is more that can be done.
But plenty of owners have figured out how to do it. It takes a lot of things to move online, the most worrisome (or impossible) of which is money. But it doesn't have to adhere to the traditional model of building a warehouse, having a phone center of tech support for online purchases, and running your B&M separately.
Dawgcatching, for one, has found this forum while using his B&M store as his "warehouse" - reaching online customers while minimizing his costs (really the time he spends typing away and offering great advice on products he knows about), and surviving in the biz.
There's plenty more at work, I'm not an industry expert, just my jumbled thoughts this morning.